Oil & Gas Prices - March 5
Posted: Fri Mar 05, 2021 9:35 am
Opening Prices;
> WTI is up 137c to $65.20/Bbl, and Brent is up 157c to $68.31/Bbl. < This where WTI was before any of us heard about Covid-19
> Natural gas is down 1.1c to $2.735/MMBtu.
AEGIS Morning Notes with my comments in blue
Crude Oil
Oil breaches $65 as OPEC+ announces its intent to keep output steady in April, in contrasts with analyst’s expectation of a 1-1.5 MMBbl/d hike
Saudi Arabia will keep its 1 MMBbl/d supplementary cut in place for at least one more month
Russia and Kazakhstan will be allowed to increase production by 130 MBbl/d and 20 MBbl/d per day, respectively (OPEC Press Release).
This means the cartel will continue to withhold around 7 MMBbl/d of supply from the market < As discussed on the AEGIS webinar on Thursday, by keeping this much oil off an under-supplied global oil market, OPEC is able to increase the current oil prices but keep the NYMEX strip in steep backwardation. Steep backwardation makes hedging future production less attractive to the upstream companies. Today, upstream companies could probably lock in $55/bbl WTI for at least a year; something that would have been extremely attractive just a month ago.
Crude futures, options surged following OPEC+’s announcement to keep output steady < Traders that were shorting oil hoping for a big increase in OPEC+ production got hammered.
WTI’s M1-M12 spread is currently at $6.07, its highest level since September 2019 < This means the APR21 futures contract is $6.07 higher than the MAR22 contract.
Option markets also saw a surge in trading, with total volume reaching 254k, its highest since March 2020
Yemen’s Houthis claim attacks on Saudi military base and airport
The attack comes only one day after the group hit an Aramco fuel depot in Jeddah (Reuters)
Attacks by the militia group have become more frequent, though the damage has been limited.
AEGIS notes if attacks persist or grow in scale, a geopolitical risk premium could return to crude prices < IMO this is more evidence that Iran is testing America's new president. The Houthis are backed by Iran.
> WTI is up 137c to $65.20/Bbl, and Brent is up 157c to $68.31/Bbl. < This where WTI was before any of us heard about Covid-19
> Natural gas is down 1.1c to $2.735/MMBtu.
AEGIS Morning Notes with my comments in blue
Crude Oil
Oil breaches $65 as OPEC+ announces its intent to keep output steady in April, in contrasts with analyst’s expectation of a 1-1.5 MMBbl/d hike
Saudi Arabia will keep its 1 MMBbl/d supplementary cut in place for at least one more month
Russia and Kazakhstan will be allowed to increase production by 130 MBbl/d and 20 MBbl/d per day, respectively (OPEC Press Release).
This means the cartel will continue to withhold around 7 MMBbl/d of supply from the market < As discussed on the AEGIS webinar on Thursday, by keeping this much oil off an under-supplied global oil market, OPEC is able to increase the current oil prices but keep the NYMEX strip in steep backwardation. Steep backwardation makes hedging future production less attractive to the upstream companies. Today, upstream companies could probably lock in $55/bbl WTI for at least a year; something that would have been extremely attractive just a month ago.
Crude futures, options surged following OPEC+’s announcement to keep output steady < Traders that were shorting oil hoping for a big increase in OPEC+ production got hammered.
WTI’s M1-M12 spread is currently at $6.07, its highest level since September 2019 < This means the APR21 futures contract is $6.07 higher than the MAR22 contract.
Option markets also saw a surge in trading, with total volume reaching 254k, its highest since March 2020
Yemen’s Houthis claim attacks on Saudi military base and airport
The attack comes only one day after the group hit an Aramco fuel depot in Jeddah (Reuters)
Attacks by the militia group have become more frequent, though the damage has been limited.
AEGIS notes if attacks persist or grow in scale, a geopolitical risk premium could return to crude prices < IMO this is more evidence that Iran is testing America's new president. The Houthis are backed by Iran.