Oil & Gas Prices - June 18
Posted: Fri Jun 18, 2021 8:33 am
Opening Prices:
> WTI is down 70c to $70.34/Bbl, and Brent is down 73c to $72.35/Bbl.
> Natural gas is down 5.8c to $3.195/MMBtu.
AEGIS Notes
Crude oil
U.S. oil fell for a second day, dipping below $71/Bbl as the Federal Reserve’s plans for future interest-rate hikes soured views on commodities (Bloomberg)
The Fed signaled it would raise rates twice by the end of 2023, causing traders to cool on trades linked to hotter inflation
“The prospect of earlier interest-rate rises propelled the dollar higher and provided traders with an excuse to take profit,” said Stephen Brennock, an analyst at brokerage PVM Oil Associates
See U.S. Dollar Index here: https://www.marketwatch.com/investing/index/dxy
Oil companies evacuate the Gulf of Mexico ahead of a tropical storm (Reuters)
All workers were evacuated from Chevron’s Genesis facility, located about 150 miles off the coast of Louisiana. Non-essential workers were removed from the company’s Big Foot, Jack/St. Malo and Tahiti production platforms
Occidental Petroleum Corp said yesterday they were withdrawing staff
Rainfall of up to 12 inches in isolated areas could hit the Gulf Coast and the Southern Appalachians, the NWS said
Iranians will head to the polls Friday in a presidential election likely to see Ebrahim Raisi replace the more moderate Hassan Rouhani (Bloomberg)
In his campaign, Raisi supported the nuclear-deal diplomacy but downplayed the accord as a “marginal matter”
Iran has the potential to bring back 1.5-2 MMBbl/d if sanctions are lifted. The return to max Iranian oil exports isn’t expected until at least mid-2022, according to Energy Aspects
Natural Gas
The July ’21 Henry Hub contract is on track for a 10c weekly loss
Cooler forecast for the U.S. East has contributed to a weekly loss of four gas-weighted cooling degree days, to bring the June total to 271
U.S. dry gas exports to Mexico reached a record high of 7.89 Bcf on June 17
Most of the gains over the last year have come from West Texas exports.
So far in June, West Texas exports to Mexico are averaging 1,451 MMcf/d, up from an average of 756 MMcf/d in June ‘20
Gas exports to Mexico will likely tick up as warmer weather approaches, and more gas is needed for power. This could help strengthen Waha prices further
TETCO issued a revised schedule for an outage on its 30” pipeline system that implies that the pipeline will be able to flow an additional 200 – 400 MMcf/d from the Northeast to the U.S. Gulf Coast
The revision may pressure gas prices as we had attributed part of the run-up in prices over the last two weeks to the TETCO outage. More flows on the pipe would loosen the Southeast gas market, and prices at Henry Hub
The EIA reported a 16-Bcf build for the week ending June 11. Much lower than the 5-yr average of 89 Bcf because PG&E reclassified 51 Bcf from working gas to base load gas. Utilities can draw gas from the base load, but there is an extra charge to do so.
The build was slightly less than the 70-Bcf build analysts expected when taking into account the reclassification. The implied injection of 67 Bcf was on the bullish end of estimates
Total stocks now stand at 2.427 Tcf, which is 453 Bcf below last year and 126 Bcf below the 5-year average. < I expect the deficit to the 5-year average to grow through at least June because the next three weeks compare to 5-year average draws of 87, 61 and 65 Bcf.
> WTI is down 70c to $70.34/Bbl, and Brent is down 73c to $72.35/Bbl.
> Natural gas is down 5.8c to $3.195/MMBtu.
AEGIS Notes
Crude oil
U.S. oil fell for a second day, dipping below $71/Bbl as the Federal Reserve’s plans for future interest-rate hikes soured views on commodities (Bloomberg)
The Fed signaled it would raise rates twice by the end of 2023, causing traders to cool on trades linked to hotter inflation
“The prospect of earlier interest-rate rises propelled the dollar higher and provided traders with an excuse to take profit,” said Stephen Brennock, an analyst at brokerage PVM Oil Associates
See U.S. Dollar Index here: https://www.marketwatch.com/investing/index/dxy
Oil companies evacuate the Gulf of Mexico ahead of a tropical storm (Reuters)
All workers were evacuated from Chevron’s Genesis facility, located about 150 miles off the coast of Louisiana. Non-essential workers were removed from the company’s Big Foot, Jack/St. Malo and Tahiti production platforms
Occidental Petroleum Corp said yesterday they were withdrawing staff
Rainfall of up to 12 inches in isolated areas could hit the Gulf Coast and the Southern Appalachians, the NWS said
Iranians will head to the polls Friday in a presidential election likely to see Ebrahim Raisi replace the more moderate Hassan Rouhani (Bloomberg)
In his campaign, Raisi supported the nuclear-deal diplomacy but downplayed the accord as a “marginal matter”
Iran has the potential to bring back 1.5-2 MMBbl/d if sanctions are lifted. The return to max Iranian oil exports isn’t expected until at least mid-2022, according to Energy Aspects
Natural Gas
The July ’21 Henry Hub contract is on track for a 10c weekly loss
Cooler forecast for the U.S. East has contributed to a weekly loss of four gas-weighted cooling degree days, to bring the June total to 271
U.S. dry gas exports to Mexico reached a record high of 7.89 Bcf on June 17
Most of the gains over the last year have come from West Texas exports.
So far in June, West Texas exports to Mexico are averaging 1,451 MMcf/d, up from an average of 756 MMcf/d in June ‘20
Gas exports to Mexico will likely tick up as warmer weather approaches, and more gas is needed for power. This could help strengthen Waha prices further
TETCO issued a revised schedule for an outage on its 30” pipeline system that implies that the pipeline will be able to flow an additional 200 – 400 MMcf/d from the Northeast to the U.S. Gulf Coast
The revision may pressure gas prices as we had attributed part of the run-up in prices over the last two weeks to the TETCO outage. More flows on the pipe would loosen the Southeast gas market, and prices at Henry Hub
The EIA reported a 16-Bcf build for the week ending June 11. Much lower than the 5-yr average of 89 Bcf because PG&E reclassified 51 Bcf from working gas to base load gas. Utilities can draw gas from the base load, but there is an extra charge to do so.
The build was slightly less than the 70-Bcf build analysts expected when taking into account the reclassification. The implied injection of 67 Bcf was on the bullish end of estimates
Total stocks now stand at 2.427 Tcf, which is 453 Bcf below last year and 126 Bcf below the 5-year average. < I expect the deficit to the 5-year average to grow through at least June because the next three weeks compare to 5-year average draws of 87, 61 and 65 Bcf.