Oil & Gas Prices - Mar 4
Posted: Thu Mar 04, 2021 10:01 am
Opening Prices:
> WTI is up 27c to $61.55/Bbl, and Brent is up 27c to $64.34/Bbl.
> Natural gas is down 3.4c to $2.782/MMBtu.
Shown above our the front month NYMEX futures contracts for April
AEGIS Morning Notes
Crude Oil
OPEC+ leaves oil market guessing ahead of todays’ ministerial meeting
Saudi Arabia and Russia held bilateral talks on Thursday to reach a consensus on its policy moving forward. Russia has pressed the Kingdom to allow the taps to open and bring output back to the market, while Saudi Arabia prefers a more cautious approach, according to Bloomberg
The group is currently cutting around 7.12 MMBbl/d. Analysts estimate the group will return 1.5 MMBbl/d in output, with Saudi Arabia undoing their 1 MMBbl/d supplementary cuts while the rest of the group brings another 500 MBbl/d online
Financial futures outpace physical pricing as refinery maintenance season approaches (Reuters)
J.P. Morgan said the benchmark Brent futures contract, which neared $68 a barrel last week before slipping to about $64 on Thursday, was “running two quarters ahead and $4 above what fundamentals warrant.”
Physical demand for crude from refiners and other consumers has ebbed this month, with physical markets trading below paper markets
Unipec re-offered six of its ten cargoes for sale but drew little interest on the open market, according to Reuters
The EIA reported a build of 21.5 MMBbls in U.S. crude-oil inventories for the week ending 2/26/2021
This week’s stats were largely distorted by the freeze-induced outages affecting refineries in PADD III, where stocks increased by 20.85 MMBbls
Total U.S. refinery utilization fell another 12% last week to bring the rate to 56%, per the EIA
Gasoline inventories also declined by 13.62 MMBbls, the largest drawdown in stocks since 1990
Natural Gas
Venture Global LNG’s Calcasieu Pass liquefaction terminal is moving at a rapid pace and supply tenders suggest a possible startup of the facility a year earlier than expectations of fall 2022 (Platts, CERAWEEK)
Venture Global trains are modular and smaller than the typical trains that are built on site. The company’s CEO Michael Sabel said this allows them to sell LNG cheaper than its U.S. competitors
Sabel said he expects the seventh and eighth trains of the 18-train facility to be installed in the coming weeks
AEGIS expects the gas market to be undersupplied for 2021 and the sped-up schedule of Venture Global could add more demand to an already tight market next winter
The weather forecast for March continues to bounce around and show wide variability, according to Commodity Weather Group (CWG)
The national demand picture shows variability over the next two weeks with transient cool to cold events and one strong warm period
The amount of variability between hot and cold lands March right in the middle of the past 20 years in terms of heating degree days (HDDs) at 610, according to CWG
For reference, in the past 20 years, 2014 was the coldest March at about 730 HDDs and 2012 was the warmest at about 390 HDDs. The 10 Year Normal is 593 HDDs.
> WTI is up 27c to $61.55/Bbl, and Brent is up 27c to $64.34/Bbl.
> Natural gas is down 3.4c to $2.782/MMBtu.
Shown above our the front month NYMEX futures contracts for April
AEGIS Morning Notes
Crude Oil
OPEC+ leaves oil market guessing ahead of todays’ ministerial meeting
Saudi Arabia and Russia held bilateral talks on Thursday to reach a consensus on its policy moving forward. Russia has pressed the Kingdom to allow the taps to open and bring output back to the market, while Saudi Arabia prefers a more cautious approach, according to Bloomberg
The group is currently cutting around 7.12 MMBbl/d. Analysts estimate the group will return 1.5 MMBbl/d in output, with Saudi Arabia undoing their 1 MMBbl/d supplementary cuts while the rest of the group brings another 500 MBbl/d online
Financial futures outpace physical pricing as refinery maintenance season approaches (Reuters)
J.P. Morgan said the benchmark Brent futures contract, which neared $68 a barrel last week before slipping to about $64 on Thursday, was “running two quarters ahead and $4 above what fundamentals warrant.”
Physical demand for crude from refiners and other consumers has ebbed this month, with physical markets trading below paper markets
Unipec re-offered six of its ten cargoes for sale but drew little interest on the open market, according to Reuters
The EIA reported a build of 21.5 MMBbls in U.S. crude-oil inventories for the week ending 2/26/2021
This week’s stats were largely distorted by the freeze-induced outages affecting refineries in PADD III, where stocks increased by 20.85 MMBbls
Total U.S. refinery utilization fell another 12% last week to bring the rate to 56%, per the EIA
Gasoline inventories also declined by 13.62 MMBbls, the largest drawdown in stocks since 1990
Natural Gas
Venture Global LNG’s Calcasieu Pass liquefaction terminal is moving at a rapid pace and supply tenders suggest a possible startup of the facility a year earlier than expectations of fall 2022 (Platts, CERAWEEK)
Venture Global trains are modular and smaller than the typical trains that are built on site. The company’s CEO Michael Sabel said this allows them to sell LNG cheaper than its U.S. competitors
Sabel said he expects the seventh and eighth trains of the 18-train facility to be installed in the coming weeks
AEGIS expects the gas market to be undersupplied for 2021 and the sped-up schedule of Venture Global could add more demand to an already tight market next winter
The weather forecast for March continues to bounce around and show wide variability, according to Commodity Weather Group (CWG)
The national demand picture shows variability over the next two weeks with transient cool to cold events and one strong warm period
The amount of variability between hot and cold lands March right in the middle of the past 20 years in terms of heating degree days (HDDs) at 610, according to CWG
For reference, in the past 20 years, 2014 was the coldest March at about 730 HDDs and 2012 was the warmest at about 390 HDDs. The 10 Year Normal is 593 HDDs.