Oil & Gas Prices - August 6
Posted: Fri Aug 06, 2021 8:31 am
Opening Prices:
> WTI is up 93c to $70.02/Bbl, and Brent is up $1.02 to $72.31/Bbl.
> Natural gas is down 0.4c to $4.136/MMBtu.
AEGIS Notes
Oil
WTI neared it’s biggest weekly loss since last October, as prices dropped 6.6% this week to settle at $69.09 on Aug 5
> Fears of the Delta variant keep price fluctuating, as new daily cases set new records in Thailand and Australia, and cities throughout China warn citizens against travel
> In the U.S., new COVID cases reached a six-month high, with over 100,000 cases reported nationwide as the Delta variant spreads through states with lower vaccine rates
Concerns over tensions in the middle east between Iran and Israel limited losses in price after an altercation early Thursday morning Aug 5 between Israel and Iran
> Israeli jets struck what its military said were rocket launch sites in Lebanon early on Thursday after rockets were fired at Israel from southern Lebanese territory, which is controlled by Iranian backed Hezbollah, in an escalation of cross-border hostilities amid heightened tensions with Iran (Reuters)
> When asked if Israel was prepared to strike Iran, Israeli Defence Minister Benny Gantz responded "Yes." Gantz also stated that Israel is ready to engage in a “multi-front” conflict that might include Iran. “Iran is a global and regional problem and an Israeli challenge” (Aljazeera)
> The comments on Thursday came as hardliner Ebrahim Raisi was due to take the oath of office as the new Iranian president, and tensions continue to rise in the region following a drone strike on an Israeli tanker off the coast of Oman where two crew members were killed last week, which Israel blamed on Iran. Iran has since denied any involvement
> Israel remains opposed to the U.S. and other western powers lifting sanctions against Iran through a revival of a 2015 nuclear deal, where Iran would stall its nuclear ambitions in exchange for sanctions relief
Natural Gas
Texas Railroad Commission floats tax credits for natural gas projects
> The provisions would better protect the state’s infrastructure from weather disasters like the deadly February freeze while also reducing flaring, the practice of burning off excess gas supplies, according to TRC commissioner Jim Wright
> In addition, equalizing the incentives to renewables could assist with infrastructure investments that would guarantee the state has ample supply
The EIA reported a storage build of 13 Bcf for the week ending July 30
> The injection into stocks was the smallest during the corresponding week since 2005, driven primarily by a massive 23-Bcf withdrawal from storage in the South-Central region
> Total stocks are now at 2,727 Bcf, with the end-of-season storage number being offered at 3,550 Bcf on ICE < This would be 185 Bcf below the 5-year average at the beginning of the 2021-2022 winter. Demand for US gas is much higher than it was five years ago when we were a net importer of gas. If we have a cold start to winter I think ngas prices will spike to over $6.00/MMBtu. Spot prices in the Northeast are already close to that.
> Inventories for the US are now at a deficit of 542 Bcf to last year and a deficit of 185 Bcf to the five-year average
Over the last 13 weeks (a quarter of a year) injections to storage have been 128 Bcf below the five year average. Unless we see injections MUCH HIGHER than the five year average over the next 13 weeks, the US natural gas and propane inventories will be at dangerous levels heading into the winter heating season and the potential for regional supply shortages will be HIGH.
> WTI is up 93c to $70.02/Bbl, and Brent is up $1.02 to $72.31/Bbl.
> Natural gas is down 0.4c to $4.136/MMBtu.
AEGIS Notes
Oil
WTI neared it’s biggest weekly loss since last October, as prices dropped 6.6% this week to settle at $69.09 on Aug 5
> Fears of the Delta variant keep price fluctuating, as new daily cases set new records in Thailand and Australia, and cities throughout China warn citizens against travel
> In the U.S., new COVID cases reached a six-month high, with over 100,000 cases reported nationwide as the Delta variant spreads through states with lower vaccine rates
Concerns over tensions in the middle east between Iran and Israel limited losses in price after an altercation early Thursday morning Aug 5 between Israel and Iran
> Israeli jets struck what its military said were rocket launch sites in Lebanon early on Thursday after rockets were fired at Israel from southern Lebanese territory, which is controlled by Iranian backed Hezbollah, in an escalation of cross-border hostilities amid heightened tensions with Iran (Reuters)
> When asked if Israel was prepared to strike Iran, Israeli Defence Minister Benny Gantz responded "Yes." Gantz also stated that Israel is ready to engage in a “multi-front” conflict that might include Iran. “Iran is a global and regional problem and an Israeli challenge” (Aljazeera)
> The comments on Thursday came as hardliner Ebrahim Raisi was due to take the oath of office as the new Iranian president, and tensions continue to rise in the region following a drone strike on an Israeli tanker off the coast of Oman where two crew members were killed last week, which Israel blamed on Iran. Iran has since denied any involvement
> Israel remains opposed to the U.S. and other western powers lifting sanctions against Iran through a revival of a 2015 nuclear deal, where Iran would stall its nuclear ambitions in exchange for sanctions relief
Natural Gas
Texas Railroad Commission floats tax credits for natural gas projects
> The provisions would better protect the state’s infrastructure from weather disasters like the deadly February freeze while also reducing flaring, the practice of burning off excess gas supplies, according to TRC commissioner Jim Wright
> In addition, equalizing the incentives to renewables could assist with infrastructure investments that would guarantee the state has ample supply
The EIA reported a storage build of 13 Bcf for the week ending July 30
> The injection into stocks was the smallest during the corresponding week since 2005, driven primarily by a massive 23-Bcf withdrawal from storage in the South-Central region
> Total stocks are now at 2,727 Bcf, with the end-of-season storage number being offered at 3,550 Bcf on ICE < This would be 185 Bcf below the 5-year average at the beginning of the 2021-2022 winter. Demand for US gas is much higher than it was five years ago when we were a net importer of gas. If we have a cold start to winter I think ngas prices will spike to over $6.00/MMBtu. Spot prices in the Northeast are already close to that.
> Inventories for the US are now at a deficit of 542 Bcf to last year and a deficit of 185 Bcf to the five-year average
Over the last 13 weeks (a quarter of a year) injections to storage have been 128 Bcf below the five year average. Unless we see injections MUCH HIGHER than the five year average over the next 13 weeks, the US natural gas and propane inventories will be at dangerous levels heading into the winter heating season and the potential for regional supply shortages will be HIGH.