Opening Prices:
> WTI is down 22c to $48.30/Bbl, and Brent is up 5c to $51.85/Bbl. < Pause before OPEC+ meeting this week.
> Natural gas is up 11.1c to $2.650/MMBtu. < Weather forecast for mid-January has turned colder. See Saturday Summary here: https://www.weatherbell.com/premium/
Aegis Hedging Solutions ideas sent to clients:
Oil: Due to a light trading week in oil along with a narrow trading range, we will use a $47.50 control pivot from the past two weeks. Buyers are in control as we head start the new year. We recommend clients continue to target scaled-up market-driven hedges from $47/bbl up to $52/bbl in Cal ’21 and Cal ’22.
Natural Gas: Buyers are in control above ~$2.40. This level will serve as a good barometer for a turnaround to more supportive weather after last Monday’s busted forecast. If sellers take control on a close below ~$2.40, add risk-driven hedges defensively as needed.
Oil & Gas Prices - Jan 4
Oil & Gas Prices - Jan 4
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Jan 4
Aegis Morning Notes:
Crude Oil
Iran seizes an oil tanker in the Persian Gulf, adding to mounting tensions in the region (Bloomberg)
The South-Korean flagged Hankuk Chemi vessel was seized due to “environmental and chemical pollution in the Persian Gulf.” The Hankuk Chemi veered off course in the Strait of Hormuz, one of the world’s most vital shipping points
The seizure comes only a few days after the discovery of a mine on the bottom of a vessel near the Iranian border on December 31, and a month after an explosion at the Saudi Arabian Port of Jeddah put the region on notice of Iranian aggression
OPEC+ members will gather to decide on whether further output hikes are warranted
According to Bloomberg, several members remain wary of any further production increases while the new COVID-19 variant- B.1.1.7 continues to spread. The rapid infection rate of the new virus strain has added a new risk of lockdowns
OPEC+ cuts are at 7.2 MMBbl/d following the initial 500 MBbl/d output hike
Venezuela exports sink to lowest levels since the 1940s under strict U.S. sanctions (Reuters)
Oil exports from Venezuela plunged by 376 MBbl/d in 2020, according to Refinitiv Eikon data and internal documents from state-run PDVSA
Venezuela’s exports of crude and refined products fell 37.5% in 2020 to 626 MBbl/d, the lowest in 77 years
Natural Gas
Prompt-month natural gas continues to reverse losses from the last two weeks as weather models added 16 Heating Degree Days (HDDs) over the weekend
Despite colder-than-normal temperatures forecasted, the Commodity Weather Group still has this month projected as the sixth warmest January in the last twenty years with 880 HDDs
U.S. working gas in storage recorded a draw that was slightly below analyst expectations to close out the final full storage week of 2020
Storage declined by 114 Bcf to 3.460 Tcf for the week ended December 25, according to the EIA
The withdrawal was just lower than the median and average of Bloomberg economist survey of a 123 Bcf withdrawal, and higher than the 87 Bcf draw reported the same week last year
Mark Christie to be sworn in as the fifth FERC commissioner today
President Trump appointed the former chair of the Virginia State Corporation Commission, and his swearing-in assures FERC a full quorum of three Republicans, Christie, Neil Chatterjee, and Chairman James Dably, and two Democrats, Allison Clements and Richard Glick (PointLogic)
Christie’s background as an attorney for the Natural Resources Defense Council and Virginia State Corporation Commissioner was praised by those in the renewables industry and will give another clean energy voice inside of FERC
President-elect Biden is expected to tap one of the agency’s two Democratic commissioners Allison Clements or Richard Glick as the next chairman
Crude Oil
Iran seizes an oil tanker in the Persian Gulf, adding to mounting tensions in the region (Bloomberg)
The South-Korean flagged Hankuk Chemi vessel was seized due to “environmental and chemical pollution in the Persian Gulf.” The Hankuk Chemi veered off course in the Strait of Hormuz, one of the world’s most vital shipping points
The seizure comes only a few days after the discovery of a mine on the bottom of a vessel near the Iranian border on December 31, and a month after an explosion at the Saudi Arabian Port of Jeddah put the region on notice of Iranian aggression
OPEC+ members will gather to decide on whether further output hikes are warranted
According to Bloomberg, several members remain wary of any further production increases while the new COVID-19 variant- B.1.1.7 continues to spread. The rapid infection rate of the new virus strain has added a new risk of lockdowns
OPEC+ cuts are at 7.2 MMBbl/d following the initial 500 MBbl/d output hike
Venezuela exports sink to lowest levels since the 1940s under strict U.S. sanctions (Reuters)
Oil exports from Venezuela plunged by 376 MBbl/d in 2020, according to Refinitiv Eikon data and internal documents from state-run PDVSA
Venezuela’s exports of crude and refined products fell 37.5% in 2020 to 626 MBbl/d, the lowest in 77 years
Natural Gas
Prompt-month natural gas continues to reverse losses from the last two weeks as weather models added 16 Heating Degree Days (HDDs) over the weekend
Despite colder-than-normal temperatures forecasted, the Commodity Weather Group still has this month projected as the sixth warmest January in the last twenty years with 880 HDDs
U.S. working gas in storage recorded a draw that was slightly below analyst expectations to close out the final full storage week of 2020
Storage declined by 114 Bcf to 3.460 Tcf for the week ended December 25, according to the EIA
The withdrawal was just lower than the median and average of Bloomberg economist survey of a 123 Bcf withdrawal, and higher than the 87 Bcf draw reported the same week last year
Mark Christie to be sworn in as the fifth FERC commissioner today
President Trump appointed the former chair of the Virginia State Corporation Commission, and his swearing-in assures FERC a full quorum of three Republicans, Christie, Neil Chatterjee, and Chairman James Dably, and two Democrats, Allison Clements and Richard Glick (PointLogic)
Christie’s background as an attorney for the Natural Resources Defense Council and Virginia State Corporation Commissioner was praised by those in the renewables industry and will give another clean energy voice inside of FERC
President-elect Biden is expected to tap one of the agency’s two Democratic commissioners Allison Clements or Richard Glick as the next chairman
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Jan 4
Closing Prices:
> WTI prompt month (FEB 21) was down $0.90 on the day, to settle at $47.62/Bbl.
> In contrast, NG prompt month (FEB 21) was up $0.042 on the day, to settle at $2.581/MMBtu.
From Market Watch
"Oil futures ended lower on Monday after the Organization of the Petroleum Exporting Countries and their allies, together known as OPEC+, failed to reach an agreement on production policy and said they plan to resume talks on Tuesday. The majority of OPEC+ favor a rollover of current output levels, but Russia and Kazakhstan want to see an increase of 500,000 barrels per day in February, according to a tweet from Amena Bakr, deputy bureau chief and chief OPEC correspondent at Energy Intelligence.
> WTI prompt month (FEB 21) was down $0.90 on the day, to settle at $47.62/Bbl.
> In contrast, NG prompt month (FEB 21) was up $0.042 on the day, to settle at $2.581/MMBtu.
From Market Watch
"Oil futures ended lower on Monday after the Organization of the Petroleum Exporting Countries and their allies, together known as OPEC+, failed to reach an agreement on production policy and said they plan to resume talks on Tuesday. The majority of OPEC+ favor a rollover of current output levels, but Russia and Kazakhstan want to see an increase of 500,000 barrels per day in February, according to a tweet from Amena Bakr, deputy bureau chief and chief OPEC correspondent at Energy Intelligence.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group