Oil & Gas Prices - Jan 27

[dan_s]

Opening Prices:
> WTI is down 12c to $52.49/Bbl, and Brent is down 10c to $55.81/Bbl.
> Natural gas is up 5.9c to $2.715/MMBtu.

Aegis Morning Notes
Crude Oil

COVID-19 impact to linger into 2023, reducing demand by 3 MMBbl/d (Vitol)
Surplus refining capacity will also be 3 MMBbl/d above demand, as new capacity additions offset retirements by older refineries
An increase in electric vehicles, working from home, and carbon-free commuting (bikes or walking), as well as city bans on diesel vehicles (Europe, in particular), and the impact of diesel-gate will threaten demand, according to Giovanni Serio, head of research at Vitol

President Biden eyes Dakota Access Pipeline as the project requires a federal easement (Bloomberg)
The U.S. court of appeals for the District of Columbia refused to revive a critical pipeline easement on Tuesday for DAPL, effectively placing the ball in President Biden’s court
According to Bloomberg’s analysis, Biden will likely not interfere in the shutdown of the pipeline, as there are other potential legal avenues that clear a path for the pipeline to be taken out of service. The political capital cost does not warrant action when the same fate for the pipeline could be reached in lower courts

EIA weekly data is due at 9:30 am CST

Natural Gas

Gas prices moved higher overnight to trade near $2.70 for the March contract
Weather model changes in the past 24-hours showed a gain of 5.2 HDDs (10 bcf) as cooler temperatures reached the Southern Midwest and South (Commodity Weather Group)
The longer-dated models for the 11-14 day window showed widespread below-average temperatures across the Lower-48 with more cold staying power west of the Mississippi

NextEra took a new write-down on the Mountain Valley Pipeline (MVP) of $1.2 billion and developers will resubmit environmental permit applications, the company said on its earnings release and FERC filing
In the FERC filing, MVP has come to a conclusion that to advance the project needs to “seek a comprehensive review of all outstanding water body and wetland crossings”
MVP said it believes the resubmissions will not cause an undue delay to the project
“Work on the MVP project is more than 92% complete, with all the work on the three compressor stations and three interconnect facilities complete, and more than 264 miles of pipe welded in place…The project is targeting completion in late 2021.”

[dan_s]

Closing Prices:
> WTI prompt month (MAR 21) was up $0.24 on the day, to settle at $52.85/Bbl.
> Also, NG prompt month (FEB 21) was up $0.104 on the day, to settle at $2.760/MMBtu.

MY TAKE: The EIA Petroleum Report was very bullish. Had it not been for the overall market weakness, I think oil and gas prices would have move higher.