Oil & Gas Prices - July 8
Posted: Thu Jul 08, 2021 8:35 am
Opening Prices:
>WTI is down 33c to $71.87/Bbl, and Brent is down 24c to $73.19/Bbl.
> Natural gas is down 3.9c to $3.557/MMBtu.
The recent uptick in the U.S. dollar is partially responsible for the dip in the price of oil.
AEGIS Notes
Crude Oil
Oil prices are trading slightly lower Thursday morning amid ongoing OPEC+ supply uncertainty and renewed concerns about the spread of Covid-19
The OPEC feud between Saudi Arabia and the UAE over OPEC production has caused volatility to surge
Multiple nations in Asia are dealing with a surge in Covid-19 cases. Japan is set to declare a new state of emergency over the Tokyo Olympics, and the WHO is urging caution about re-openings (Bloomberg)
Indonesia is in the middle of a major outbreak. Thailand is set to consider a partial lockdown
The oil volatility index has surged this week amid OPEC’s disagreement (Bloomberg)
The CBOE Oil ETF VIX Index jumped 28% over Tuesday and Wednesday in the sharpest two-day move since March
The average volatility for June as oil prices were rising was about 33 on the index
As of Thursday, the volatility index was at 42, a material move higher
The EIA is set to report their weekly oil inventory data today, a day later than usual due to the holiday week
The average survey of economist on Bloomberg expect a 4.4 MMBbl withdrawal in total oil stocks
US oil stocks have fallen every week since April 23 as domestic supply remains down year-over-year and state reopening has led to a sharp rise/recovery in oil demand
Natural Gas
The prompt-month (August ’21) Henry Hub contract is down nearly 15c from its high of $3.70 reached on July 2, and is trading near $3.55
U.S. dry gas production has staged a strong recovery since the holiday weekend, with Platts showing output has climbed from 87.6 Bcf/d to 90 Bcf/d
According to Bloomberg, the hot weather which has helped fuel the rally is expected to persist in the U.S. West through July 15, however the Midwest, East and South should see more mild weather through next week
After posting ten days of gains, the contract is now on track for its third consecutive daily loss
The EIA is expected to report a 33-Bcf injection for the week ending July 2, which would be less than the five-year average build of 63-Bcf during the corresponding week
Analysts estimates ranged from a build of 22 Bcf to 47 Bcf
A build within this range would bring total stocks near 2.591 Tcf and the deficit to the five-year average near 173 Bcf
The current end-of-season storage number settled at 3.66 Tcf on ICE < The U.S. now needs close to 4 Tcf of ngas in storage by mid-November to make it through a cold winter without regional shortages. So, if storage is sitting at 3.7 Tcf four months from now we should see natural gas futures for DEC21 to MAR22 over $4.00.
>WTI is down 33c to $71.87/Bbl, and Brent is down 24c to $73.19/Bbl.
> Natural gas is down 3.9c to $3.557/MMBtu.
The recent uptick in the U.S. dollar is partially responsible for the dip in the price of oil.
AEGIS Notes
Crude Oil
Oil prices are trading slightly lower Thursday morning amid ongoing OPEC+ supply uncertainty and renewed concerns about the spread of Covid-19
The OPEC feud between Saudi Arabia and the UAE over OPEC production has caused volatility to surge
Multiple nations in Asia are dealing with a surge in Covid-19 cases. Japan is set to declare a new state of emergency over the Tokyo Olympics, and the WHO is urging caution about re-openings (Bloomberg)
Indonesia is in the middle of a major outbreak. Thailand is set to consider a partial lockdown
The oil volatility index has surged this week amid OPEC’s disagreement (Bloomberg)
The CBOE Oil ETF VIX Index jumped 28% over Tuesday and Wednesday in the sharpest two-day move since March
The average volatility for June as oil prices were rising was about 33 on the index
As of Thursday, the volatility index was at 42, a material move higher
The EIA is set to report their weekly oil inventory data today, a day later than usual due to the holiday week
The average survey of economist on Bloomberg expect a 4.4 MMBbl withdrawal in total oil stocks
US oil stocks have fallen every week since April 23 as domestic supply remains down year-over-year and state reopening has led to a sharp rise/recovery in oil demand
Natural Gas
The prompt-month (August ’21) Henry Hub contract is down nearly 15c from its high of $3.70 reached on July 2, and is trading near $3.55
U.S. dry gas production has staged a strong recovery since the holiday weekend, with Platts showing output has climbed from 87.6 Bcf/d to 90 Bcf/d
According to Bloomberg, the hot weather which has helped fuel the rally is expected to persist in the U.S. West through July 15, however the Midwest, East and South should see more mild weather through next week
After posting ten days of gains, the contract is now on track for its third consecutive daily loss
The EIA is expected to report a 33-Bcf injection for the week ending July 2, which would be less than the five-year average build of 63-Bcf during the corresponding week
Analysts estimates ranged from a build of 22 Bcf to 47 Bcf
A build within this range would bring total stocks near 2.591 Tcf and the deficit to the five-year average near 173 Bcf
The current end-of-season storage number settled at 3.66 Tcf on ICE < The U.S. now needs close to 4 Tcf of ngas in storage by mid-November to make it through a cold winter without regional shortages. So, if storage is sitting at 3.7 Tcf four months from now we should see natural gas futures for DEC21 to MAR22 over $4.00.