Oil & Gas Prices - August 19
Posted: Thu Aug 19, 2021 9:00 am
I will be traveling to Dallas today.
Opening Prices:
> WTI is down $1.93 to $63.53/Bbl, and Brent is down $1.82 to $66.41/Bbl.
> Natural gas is down 7.2c to $3.780/MMBtu.
AEGIS Notes
Oil
West Texas Intermediate dropped below $63.50 on Thursday morning, the lowest level since May 20th
> The U.S. Federal Reserve signaled it was ready to start tapering asset purchases within a month, helping the dollar and hurting currencies (Bloomberg)
> Iran has nearly doubled its uranium enrichment, moving Tehran close to levels required for nuclear weapons
The U.S. dollar hit a nine-month high on Thursday as traders and investors weighed a likely reduction in U.S. stimulus (WSJ)
> Fed minutes from their July meeting, released Wednesday, showed that the bank would likely start scaling back the $120 billion in monthly purchases of Treasury and mortgage securities at one of the three remaining policy meetings in 2021
> Several officials are split on the timing of when to start reducing asset purchases. Some members favor quick actions in order to position the Fed to potentially raise interest rates if the economy strengthens further next year. Others believe the Fed could wait in order to observe stronger evidence of a healed job market
Saudi Arabia, OPEC+’s co-leader, is probably considering a postponement of planned supply increases, according to energy consultant Energy Aspects (Bloomberg)
> In an Aug. 16 note, Energy Aspects said, “Given the recent sell-off, Riyadh is likely thinking about whether to push for a short pause on upcoming quota increases from October amid the demand concerns related to the delta variant.”
> AEGIS notes that other prominent energy analysts mentioned similar potential action from OPEC+ after the IEA and OPEC showed a loser supply and demand balance for 2022 in their monthly reports.
Natural Gas
U.S. Natural gas futures are trading near their lowest levels in over a month
> Northeast weather forecasts have moderated as Tropical Storm Henri takes aim for the region. The storm is expected to bring rain, strong winds, and cooler weather. Henri could be a Cat 1 hurricane when it reaches Boston.
The EIA is set to release last week’s inventory report at 9:30am
> The EIA is expected to report a 35-Bcf injection for the week ending August 13, which would be less than the 45-Bcf build in the corresponding week of last year
> Analysts estimates ranged from a build of 25 Bcf to 42 Bcf
> A build within this range would bring total stocks near 2.811 Tcf and the deficit to the five-year average near 185 Bcf
> The current end-of-season storage number settled at 3.510 Tcf on ICE < The 5-year average ngas storage level to start the winter heating season is 3.735 Tcf.
Bump in Canadian exports to US Midwest to support AECO prices this winter - Platts
> Platts is bullish for AECO this winter, as it expects the Midwest to import less gas from Oklahoma to Chicago
> Low ANR storage inventories further add to the bullish sentiment for AECO gas prices this winter
Opening Prices:
> WTI is down $1.93 to $63.53/Bbl, and Brent is down $1.82 to $66.41/Bbl.
> Natural gas is down 7.2c to $3.780/MMBtu.
AEGIS Notes
Oil
West Texas Intermediate dropped below $63.50 on Thursday morning, the lowest level since May 20th
> The U.S. Federal Reserve signaled it was ready to start tapering asset purchases within a month, helping the dollar and hurting currencies (Bloomberg)
> Iran has nearly doubled its uranium enrichment, moving Tehran close to levels required for nuclear weapons
The U.S. dollar hit a nine-month high on Thursday as traders and investors weighed a likely reduction in U.S. stimulus (WSJ)
> Fed minutes from their July meeting, released Wednesday, showed that the bank would likely start scaling back the $120 billion in monthly purchases of Treasury and mortgage securities at one of the three remaining policy meetings in 2021
> Several officials are split on the timing of when to start reducing asset purchases. Some members favor quick actions in order to position the Fed to potentially raise interest rates if the economy strengthens further next year. Others believe the Fed could wait in order to observe stronger evidence of a healed job market
Saudi Arabia, OPEC+’s co-leader, is probably considering a postponement of planned supply increases, according to energy consultant Energy Aspects (Bloomberg)
> In an Aug. 16 note, Energy Aspects said, “Given the recent sell-off, Riyadh is likely thinking about whether to push for a short pause on upcoming quota increases from October amid the demand concerns related to the delta variant.”
> AEGIS notes that other prominent energy analysts mentioned similar potential action from OPEC+ after the IEA and OPEC showed a loser supply and demand balance for 2022 in their monthly reports.
Natural Gas
U.S. Natural gas futures are trading near their lowest levels in over a month
> Northeast weather forecasts have moderated as Tropical Storm Henri takes aim for the region. The storm is expected to bring rain, strong winds, and cooler weather. Henri could be a Cat 1 hurricane when it reaches Boston.
The EIA is set to release last week’s inventory report at 9:30am
> The EIA is expected to report a 35-Bcf injection for the week ending August 13, which would be less than the 45-Bcf build in the corresponding week of last year
> Analysts estimates ranged from a build of 25 Bcf to 42 Bcf
> A build within this range would bring total stocks near 2.811 Tcf and the deficit to the five-year average near 185 Bcf
> The current end-of-season storage number settled at 3.510 Tcf on ICE < The 5-year average ngas storage level to start the winter heating season is 3.735 Tcf.
Bump in Canadian exports to US Midwest to support AECO prices this winter - Platts
> Platts is bullish for AECO this winter, as it expects the Midwest to import less gas from Oklahoma to Chicago
> Low ANR storage inventories further add to the bullish sentiment for AECO gas prices this winter