Oil & Gas Prices - Dec 30
Posted: Wed Dec 30, 2020 9:42 am
Opening Prices:
> WTI is up 23c to $48.23/Bbl, and Brent is up 25c to $51.34/Bbl.
> Natural gas is up 2.2c to $2.466/MMBtu.
Aegis Hedging Solutions morning notes
Crude Oil
The deterioration in the value of the dollar (DXY – Dollar Spot Index) has helped support oil prices over the past several days (Bloomberg)
The Bloomberg Dollar Index has now reached its lowest point since April 2018 and is currently trading near 89.69
The dollar has been pressured by negative sentiment surrounding the COVID-19 stimulus package, with the index falling by 56 pips since the announcement
Colorado confirms the first COVID-19 variant-B.1.1.7 case in the United States (Reuters)
The new strain has been wreaking havoc in London as more than 16 million citizens have been forced to stay at home to mitigate the spread
The B.1.1.7 strain is reported to be up to 70% more contagious, though the virus effects mirror that of the original strain
COVID cases doubled in London over the past week, with over 60% of the new cases attributed to the new strain, according to government statistics
EIA weekly data is due at 9:30 am CST. Here is what the market expects:
U.S. Crude Inventories: – 2,449 MBbls (Avg. Bloomberg surveys)
U.S. Gasoline Inventories: + 212 MBbls
U.S. Distillate Inventories: – 402 MBbls
U.S. Refinery Utilization: + 0.38% change
Natural Gas
The February 2021 contract is now prompt after the January 2021 contract rallied approximately $0.17/MMBtu yesterday during its final day of trading
The remaining winter months for 2021 are still facing pressure from warmer-than-normal temperatures as we head into peak winter and any call skew has all but disappeared
However, pricing for 1Q2022 is a bit more favorable for costless collars as you gain nearly 2:1 upside versus downside participation
China’s state-owned oil company CNOOC leads group in LNG purchase on the Shanghai Petroleum and Natural Gas Exchange (Reuters)
The exchange recently launched a new option for groups to purchase LNG tenders that allow smaller firms to participate in purchasing of a larger cargo. Each group has a “leader” who is responsible for shipping and distribution and must own an LNG terminal to receive shipments
China National Offshore Oil Corp (CNOOC) has purchased a 120,000-tonne LNG cargo that it will be responsible for shipping and distribution to the larger group
China is the second largest LNG importer in the world behind Japan and is seeking to create an Asian benchmark for LNG through their Shanghai exchange
Waha prompt-month contract settles in positive territory for the first time since 2015 < Good news for Permian Basin upstream companies.
Significantly colder weather is expected in the West Texas area through the new year, increasing demand in the surrounding area. During the last major West Texas cold front, supply outages totaled 2 Bcf/d (Platts)
West Texas Gas Price has also been supported by the completion of short-term maintenance on EPNG’s Line 2000 segment from Afton to Lordsburg
> WTI is up 23c to $48.23/Bbl, and Brent is up 25c to $51.34/Bbl.
> Natural gas is up 2.2c to $2.466/MMBtu.
Aegis Hedging Solutions morning notes
Crude Oil
The deterioration in the value of the dollar (DXY – Dollar Spot Index) has helped support oil prices over the past several days (Bloomberg)
The Bloomberg Dollar Index has now reached its lowest point since April 2018 and is currently trading near 89.69
The dollar has been pressured by negative sentiment surrounding the COVID-19 stimulus package, with the index falling by 56 pips since the announcement
Colorado confirms the first COVID-19 variant-B.1.1.7 case in the United States (Reuters)
The new strain has been wreaking havoc in London as more than 16 million citizens have been forced to stay at home to mitigate the spread
The B.1.1.7 strain is reported to be up to 70% more contagious, though the virus effects mirror that of the original strain
COVID cases doubled in London over the past week, with over 60% of the new cases attributed to the new strain, according to government statistics
EIA weekly data is due at 9:30 am CST. Here is what the market expects:
U.S. Crude Inventories: – 2,449 MBbls (Avg. Bloomberg surveys)
U.S. Gasoline Inventories: + 212 MBbls
U.S. Distillate Inventories: – 402 MBbls
U.S. Refinery Utilization: + 0.38% change
Natural Gas
The February 2021 contract is now prompt after the January 2021 contract rallied approximately $0.17/MMBtu yesterday during its final day of trading
The remaining winter months for 2021 are still facing pressure from warmer-than-normal temperatures as we head into peak winter and any call skew has all but disappeared
However, pricing for 1Q2022 is a bit more favorable for costless collars as you gain nearly 2:1 upside versus downside participation
China’s state-owned oil company CNOOC leads group in LNG purchase on the Shanghai Petroleum and Natural Gas Exchange (Reuters)
The exchange recently launched a new option for groups to purchase LNG tenders that allow smaller firms to participate in purchasing of a larger cargo. Each group has a “leader” who is responsible for shipping and distribution and must own an LNG terminal to receive shipments
China National Offshore Oil Corp (CNOOC) has purchased a 120,000-tonne LNG cargo that it will be responsible for shipping and distribution to the larger group
China is the second largest LNG importer in the world behind Japan and is seeking to create an Asian benchmark for LNG through their Shanghai exchange
Waha prompt-month contract settles in positive territory for the first time since 2015 < Good news for Permian Basin upstream companies.
Significantly colder weather is expected in the West Texas area through the new year, increasing demand in the surrounding area. During the last major West Texas cold front, supply outages totaled 2 Bcf/d (Platts)
West Texas Gas Price has also been supported by the completion of short-term maintenance on EPNG’s Line 2000 segment from Afton to Lordsburg