Oil & Gas Prices - April 22

[dan_s]

Opening Prices:
> WTI is up 11c to $61.46/Bbl, and Brent is up 7c to $65.39/Bbl.
> Natural gas is down 3.0c to $2.662/MMBtu.

AEGIS Notes
Crude Oil

Pandemic FEAR the roadblock for oil prices
India recorded world's highest one-day surge in COVID infections
The country recorded 314,835 new cases on Wednesday, surpassing the previous record of 314,312 recorded by the U.S. on December 21
India now has 16 MM cases, the second-highest total behind the U.S.
Additionally, India has only administered 132 million vaccine doses in a country of 1.3 billion citizens.
According to Bloomberg’s vaccine tracker, only 4.8% of its population has been vaccinated

The market received bearish data reported by the EIA on Wednesday
The EIA reported a build of (+) 595 MBbls for the week ending April 16, well above the estimate of a (-) 3,265 MBbls draw
Inventories for the U.S. are now at a deficit of 10.601 MBbls to last year and a surplus of 7.82 MBbls to the five-year average.

A new nuclear deal that would remove sanctions on Iran is currently being negotiated
According to Bloomberg NEF, a new nuclear deal is inevitable, which would return 1-1.5MMBbl/d of output
A senior U.S. state department official told Bloomberg the two sides are closer to the beginning of negotiations than the end and that much progress needs to be made before a deal will be official (but the U.S. is not enforcing the sanctions that Trump put on Iran).

Natural Gas

Lower Permian natural gas production and strong demand from surrounding markets tighten the supply balance in West Texas and help Waha cash basis trade near recent highs (Platts)
In April so far, Waha has averaged 18c below Henry Hub
Month to date, production from West Texas has averaged about 11.7 Bcf/d, with the latter part of April trending closer to 11.6 Bcf/d, according to S&P Global

The combination of strong industrial demand in Texas and record-high LNG demand has increased the need for natural gas
Stronger gas competition from the Gulf Coast for Permian supply has helped Southern California gas prices move higher. Cash basis of SoCal Gas city-gate price has averaged over 80 cents in April – 25c higher than March

The MAY21 natural gas NYMEX contract price is lower this morning by $0.026/MMBtu to $2.667/MMBtu. Overnight weather models showed a decrease of demand by 10.2 HDDs, according to CWG
Warmth is making a comeback after previous forecasts showed more widespread below-average temperatures in the Central US
Weather models for the early May time frame show a warmer trend.
The middle of May is typically when cooling demand starts to outstrip national heating demand values

[dan_s]

Closing Prices;
> WTI prompt month (JUN 21) was up $0.08 on the day, to settle at $61.43/Bbl.
> NG prompt month (MAY 21) was up $0.057 on the day, to settle at $2.749/MMBtu.