Opening Prices:
> WTI is down 73c to $79.91/Bbl, and Brent is down 73c to $82.69/Bbl.
> Natural gas is down 1.5c to $5.490/MMBtu.
AEGIS Notes
Oil
After four consecutive daily gains, WTI is trading 79c lower, near $79.81
> OPEC released its October Monthly Oil Market Report (MOMR), which paints a pessimistic demand outlook
> Their 2021 global oil demand growth forecast was revised lower from a year-over-year demand increase of 5.96/MMBbl/d to 5.8 MMBbl/d. < Oil demand is almost back to pre-pandemic level of about 100 million barrels per day. Non-OPEC+ production is more than 2.5 MMBbl/day lower than where it was at the end of 2019. More than half of the decline is in the U.S.
Iraq’s oil minister sees a balanced market, with crude prices stabilizing around $85/bbl < This will increase all of my upstream valuations.
> Internal OPEC+ analysis shows that while the market is in a supply deficit, a surplus could arrive by as soon as December, and the alliance will continue with its conservative approach < IMO the cartel is saying this just to justify their decision to stay with their plan of adding 400,000 bpd of additional supply each month. October is always a period of lower global oil demand. Demand for heating oil picks up mid-November. The supply deficit will spike in May, 2022 and I expect all of OPEC+ production capacity will need to come back on-line in Q3 2022 to meet global demand.
> The next OPEC+ meeting is scheduled for November 4, 2021. At the last meeting, the cartel announced a 400 MBbl/d raise despite calls from the U.S. and other consumers to return more
Natural Gas
Gazprom starts gas withdraws from storage this week in an effort to steady prices (Reuters)
> Russia's Deputy Foreign Minister Sergei Ryabkov stated "We favor energy security of Europe; we want to work collaboratively...Gazprom has in fact started pumping out from its reserves into the pipelines to stabilize the market"
> “Nothing can be delivered beyond the contracts…How? For free? It is a matter of negotiating with Gazprom” Kremlin spokesperson Dmitry Peskov told reporters
> The statements and withdraw comes amid scrutiny that Russia is holding back production to Europe to pressure a quicker approval process for Nord Stream 2. > According to Bloomberg, Russia has increased gas deliveries to Europe by 15%
Mother Nature and Old Man Winter are now in control of natural gas demand
> Overnight weather runs were slightly bearish, losing ~2 HDDs over the next two weeks while losing no CDDs
> The weather outlook for the next month looks mild as shoulder season approaches an end, keeping demand low, as power generation for wind picks up the slack (NGI)
See the ten day weather forecast here: https://weather.com/maps/tendayforecast
When overnight lows in the 40s move into the Great Lakes Region, demand for natural gas picks up
Oil & Gas Prices - Oct 13
Oil & Gas Prices - Oct 13
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Oct 13
OPEC kept its forecast for demand next year unchanged at an average of 100.8 million barrels a day. That’s an increase of some 4% from this year’s average and implies that world demand will have more or less returned to its pre-pandemic trajectory by the end of 2022.
By 9:15 AM ET (1315 GMT), U.S. crude futures were down 1.0% at $79.81 a barrel, the first time this week they’ve dipped below the $80 threshold. Brent futures were down 1.1% at $82.53 a barrel.
The market is bracing for weekly inventory data from the American Petroleum Institute, a day later than usual because of the Columbus Day holiday. A marginal increase of just over 100,000 barrels is expected from the government’s data, which are due on Thursday.
OPEC’s wasn’t all bearish by any means: it said that supply outside the bloc had been crimped for longer than expected and reduced its estimate of average 2021 supplies from non-OPEC countries by 210,000 barrels a day, chiefly because of the outages that followed Hurricane Ida.
Supply shortfalls outside the bloc increase the need for OPEC – which controls most of the world’s spare capacity – to raise output. OPEC estimated the ‘call’ on its production at 29.36 million barrels a day in the fourth quarter, more than 1 million b/d above what the bloc is scheduled to be producing even by the end of December under its plan for phased output increases. < This means that OECD oil inventories, the primary driver of oil prices, will continue to decline. OECD oil inventories normally build this time of year.
Elsewhere, Russian President Vladimir Putin warned that $100/bbl oil prices are "quite possible" again due to past under-investment, which he said was a result of misguided policy choices by western countries.
His comments were an echo of a warning from the International Energy Agency earlier on Wednesday, which said in its annual World Energy Outlook that the world isn’t investing enough in fossil fuels to avoid a rerun of this year’s market disruptions. The IEA was more concerned, however, with the failure at the same time to invest enough in renewable energy to meet the goals of the Paris Climate Accord. < The IEA is based in Paris. Everyone working at the IEA knows they must support the Climate Change Wacko Agenda if they want to keep their jobs. Earlier this year, IEA put out a ridiculous opinion piece that said we needed to stop investing in oil exploration because wind, solar and fairy dust would reduce oil demand. Maybe in Paris, France but not in Texas.
Putin repeated that Russia is ready to pump more natural gas to Europe, but again urged the bloc to commit to new long-term contracts with Gazprom (MCX:GAZP), pointing out with relish that the current situation in European gas markets is the result of depending too much on spot markets. < Putin is just a tiny bit smarter than Joe Biden. He knows that he has leverage over all of Europe and he is going to use it to help Gazprom get a favorable long-term contract for Russia. The U.S. has lost most of its leverage in the world.
By 9:15 AM ET (1315 GMT), U.S. crude futures were down 1.0% at $79.81 a barrel, the first time this week they’ve dipped below the $80 threshold. Brent futures were down 1.1% at $82.53 a barrel.
The market is bracing for weekly inventory data from the American Petroleum Institute, a day later than usual because of the Columbus Day holiday. A marginal increase of just over 100,000 barrels is expected from the government’s data, which are due on Thursday.
OPEC’s wasn’t all bearish by any means: it said that supply outside the bloc had been crimped for longer than expected and reduced its estimate of average 2021 supplies from non-OPEC countries by 210,000 barrels a day, chiefly because of the outages that followed Hurricane Ida.
Supply shortfalls outside the bloc increase the need for OPEC – which controls most of the world’s spare capacity – to raise output. OPEC estimated the ‘call’ on its production at 29.36 million barrels a day in the fourth quarter, more than 1 million b/d above what the bloc is scheduled to be producing even by the end of December under its plan for phased output increases. < This means that OECD oil inventories, the primary driver of oil prices, will continue to decline. OECD oil inventories normally build this time of year.
Elsewhere, Russian President Vladimir Putin warned that $100/bbl oil prices are "quite possible" again due to past under-investment, which he said was a result of misguided policy choices by western countries.
His comments were an echo of a warning from the International Energy Agency earlier on Wednesday, which said in its annual World Energy Outlook that the world isn’t investing enough in fossil fuels to avoid a rerun of this year’s market disruptions. The IEA was more concerned, however, with the failure at the same time to invest enough in renewable energy to meet the goals of the Paris Climate Accord. < The IEA is based in Paris. Everyone working at the IEA knows they must support the Climate Change Wacko Agenda if they want to keep their jobs. Earlier this year, IEA put out a ridiculous opinion piece that said we needed to stop investing in oil exploration because wind, solar and fairy dust would reduce oil demand. Maybe in Paris, France but not in Texas.
Putin repeated that Russia is ready to pump more natural gas to Europe, but again urged the bloc to commit to new long-term contracts with Gazprom (MCX:GAZP), pointing out with relish that the current situation in European gas markets is the result of depending too much on spot markets. < Putin is just a tiny bit smarter than Joe Biden. He knows that he has leverage over all of Europe and he is going to use it to help Gazprom get a favorable long-term contract for Russia. The U.S. has lost most of its leverage in the world.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Oct 13
JKM LNG prices surge past $50/MMBtu mark as European gas crisis intensifies
50!!!!
50!!!!
Re: Oil & Gas Prices - Oct 13
In the last 30 minutes (at 10:30 AM CT) all Moving Averages and Technical Indicators have "gone green" to Strong Buy for crude oil.
Energy Report: Massively Underinvested My comments are in blue.
By Phil Flynn (Oct 13, 2021 09:59AM ET)
When it comes to the great energy transition, the consumers and the economy just can’t win! The world is in a man-made catch 22. The International Energy Agency (IEA) says that the world is not investing enough in green fuels to meet climate goals nor is it investing enough in fossil fuels to meet demand. Moody’s rating agency has said that global annual upstream spending needs to increase by as much as 54 percent to $542 billion if the oil market is to avert the next supply shortage shock. What about the current shock? < When an outfit like Moody's says an energy supply shortage SHOCK is coming, we know the "Paradigm Shift" I told you about months ago is now spreading like wild fire on Wall Street.
Moody’s says that this year, spending is expected at $352 billion, while medium-term annual investment has to grow to $542 billion to keep up with the demand returning from the pandemic slump, according to the report. “The industry will need to spend significantly more, especially if oil and gas demand keeps climbing beyond pre-pandemic levels through 2025,” Moody’s analysts wrote in the report. The Wall Street Journal wrote that, “Fatih Birol, executive director of the IEA, in a statement accompanying its monthly report, lamented the failure to invest enough to meet future energy needs, saying the situation is “setting the stage for a volatile period ahead.”
The Wall Street Journal pointed out that the agency for the first time forecasts an eventual decline in oil demand in all three of its scenarios—from the most status quo assumption to the most ambitiously green (net-zero emissions by 2050). Under its most conservative “stated policies scenario,” which is based on climate policies that are already in place and those that are under development, the IEA expects oil demand to peak in the mid-2030s at roughly 104 million barrels a day from almost 100 million today, with a slow decline through 2050. < There is a chart in EIA's most recent long-term outlook for global energy demand that indicates that "Petroleum and Other Liquid" supplies must increase by 25% from 2020 to 2050 and that crude oil and natural gas will still be ~50% of global energy supply by 2050, compared to ~57% in 2020. Coal is the only hydrocarbon based primary energy source that goes down over the next 30 years in the EIA forecast.
Yet the Journal says that this is quite a different picture compared with that painted by the Organization of the Petroleum Exporting Countries, which in its World Oil Outlook last month predicted that oil demand will continue to rise until at least 2045. The IEA’s most ambitious scenario—net-zero by 2050—sees oil demand shrinking to a quarter of today’s levels. Differences of opinion are natural, but the IEA’s report last year stopped including a forecast for a “current policies scenario,” which excludes goals that governments have announced but aren’t enforcing. The agency had said back in 2020 that this was because it is “difficult to imagine this ‘business-as-usual approach prevailing in today’s circumstances.” < IEA is based on Paris, France and everyone that works their knows that their future employment depends on belief in Global Warming.
That is troubling on several levels, but mainly because it rules out a real possibility that governments might not meet those targets. Its latest “stated policies scenario,” for example, includes some distant targets in the U.S. such as 100% carbon-free electricity by 2050 in at least 20 states, as well as California’s goal for all new passenger cars and light trucks sold to be zero-emission vehicles by 2035. The risk is that the IEA’s forecast becomes more of a wish list than a clear-eyed look, according to the Journal. < IMO there is a better chance that half of California falls into the Pacific Ocean by 2035.
In the meantime, the fallout from the energy crisis is already rocking the globe and OPEC is in no hurry to help out. OPEC, in their latest report according to Reuters, says that it has trimmed its world oil demand forecast for 2021 while maintaining its 2022 view, its monthly report showed on Wednesday, but it said surging natural gas prices could boost demand for oil products as end-users switch space heating fuels. The Organization of the Petroleum Exporting Countries (OPEC) now expects oil demand to grow by 5.82 million barrels per day in 2021, down from 5.96 million bpd in its previous forecast, saying that the downward revision was mainly driven by data for the first three quarters of the year. It maintained a growth forecast of another 4.2 million bpd for next year. OPEC said, however, that natural gas prices at record highs and could provide a potential tailwind to oil demand growth as industrial users switch to oil products instead, according to Reuters.
Russia has your back Europe, at the right price that is. Russia’s Putin: "Nord Stream 2, Turkstream and other pipelines will provide energy security, cut greenhouse emissions. We need to agree on global mechanisms for ways to balance energy markets. Russia meets its contractual obligations including in Europe and is ready to discuss additional actions. We are working on energy safety in Europe." Not very comforting.
In the meantime, factories are shutting down in Europe! Energy and power shortages are in China and India and the risks could spread to the US. Is the White House ready to meet this coming crisis? It’s just a question.
The consolidation is very bullish. We will get the delayed American Petroleum Institute oil report today after the close and we are expecting drawdowns across the board modest as they may be. There is not a lot of bearish news in the market at all right now and the only concern, of course, is the market is still a bit overbought. Recent action is working off some of that overbought pressure and natural gas futures look like they have found some support on the correction. Use this weakness to put on bullish strategies. If you can’t afford straight calls, you might want to consider looking at some bull call spreads or possibly some butterfly possibilities.
Energy Report: Massively Underinvested My comments are in blue.
By Phil Flynn (Oct 13, 2021 09:59AM ET)
When it comes to the great energy transition, the consumers and the economy just can’t win! The world is in a man-made catch 22. The International Energy Agency (IEA) says that the world is not investing enough in green fuels to meet climate goals nor is it investing enough in fossil fuels to meet demand. Moody’s rating agency has said that global annual upstream spending needs to increase by as much as 54 percent to $542 billion if the oil market is to avert the next supply shortage shock. What about the current shock? < When an outfit like Moody's says an energy supply shortage SHOCK is coming, we know the "Paradigm Shift" I told you about months ago is now spreading like wild fire on Wall Street.
Moody’s says that this year, spending is expected at $352 billion, while medium-term annual investment has to grow to $542 billion to keep up with the demand returning from the pandemic slump, according to the report. “The industry will need to spend significantly more, especially if oil and gas demand keeps climbing beyond pre-pandemic levels through 2025,” Moody’s analysts wrote in the report. The Wall Street Journal wrote that, “Fatih Birol, executive director of the IEA, in a statement accompanying its monthly report, lamented the failure to invest enough to meet future energy needs, saying the situation is “setting the stage for a volatile period ahead.”
The Wall Street Journal pointed out that the agency for the first time forecasts an eventual decline in oil demand in all three of its scenarios—from the most status quo assumption to the most ambitiously green (net-zero emissions by 2050). Under its most conservative “stated policies scenario,” which is based on climate policies that are already in place and those that are under development, the IEA expects oil demand to peak in the mid-2030s at roughly 104 million barrels a day from almost 100 million today, with a slow decline through 2050. < There is a chart in EIA's most recent long-term outlook for global energy demand that indicates that "Petroleum and Other Liquid" supplies must increase by 25% from 2020 to 2050 and that crude oil and natural gas will still be ~50% of global energy supply by 2050, compared to ~57% in 2020. Coal is the only hydrocarbon based primary energy source that goes down over the next 30 years in the EIA forecast.
Yet the Journal says that this is quite a different picture compared with that painted by the Organization of the Petroleum Exporting Countries, which in its World Oil Outlook last month predicted that oil demand will continue to rise until at least 2045. The IEA’s most ambitious scenario—net-zero by 2050—sees oil demand shrinking to a quarter of today’s levels. Differences of opinion are natural, but the IEA’s report last year stopped including a forecast for a “current policies scenario,” which excludes goals that governments have announced but aren’t enforcing. The agency had said back in 2020 that this was because it is “difficult to imagine this ‘business-as-usual approach prevailing in today’s circumstances.” < IEA is based on Paris, France and everyone that works their knows that their future employment depends on belief in Global Warming.
That is troubling on several levels, but mainly because it rules out a real possibility that governments might not meet those targets. Its latest “stated policies scenario,” for example, includes some distant targets in the U.S. such as 100% carbon-free electricity by 2050 in at least 20 states, as well as California’s goal for all new passenger cars and light trucks sold to be zero-emission vehicles by 2035. The risk is that the IEA’s forecast becomes more of a wish list than a clear-eyed look, according to the Journal. < IMO there is a better chance that half of California falls into the Pacific Ocean by 2035.
In the meantime, the fallout from the energy crisis is already rocking the globe and OPEC is in no hurry to help out. OPEC, in their latest report according to Reuters, says that it has trimmed its world oil demand forecast for 2021 while maintaining its 2022 view, its monthly report showed on Wednesday, but it said surging natural gas prices could boost demand for oil products as end-users switch space heating fuels. The Organization of the Petroleum Exporting Countries (OPEC) now expects oil demand to grow by 5.82 million barrels per day in 2021, down from 5.96 million bpd in its previous forecast, saying that the downward revision was mainly driven by data for the first three quarters of the year. It maintained a growth forecast of another 4.2 million bpd for next year. OPEC said, however, that natural gas prices at record highs and could provide a potential tailwind to oil demand growth as industrial users switch to oil products instead, according to Reuters.
Russia has your back Europe, at the right price that is. Russia’s Putin: "Nord Stream 2, Turkstream and other pipelines will provide energy security, cut greenhouse emissions. We need to agree on global mechanisms for ways to balance energy markets. Russia meets its contractual obligations including in Europe and is ready to discuss additional actions. We are working on energy safety in Europe." Not very comforting.
In the meantime, factories are shutting down in Europe! Energy and power shortages are in China and India and the risks could spread to the US. Is the White House ready to meet this coming crisis? It’s just a question.
The consolidation is very bullish. We will get the delayed American Petroleum Institute oil report today after the close and we are expecting drawdowns across the board modest as they may be. There is not a lot of bearish news in the market at all right now and the only concern, of course, is the market is still a bit overbought. Recent action is working off some of that overbought pressure and natural gas futures look like they have found some support on the correction. Use this weakness to put on bullish strategies. If you can’t afford straight calls, you might want to consider looking at some bull call spreads or possibly some butterfly possibilities.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Oct 13
Closing Prices:
> WTI prompt month (NOV 21) was down $0.20 on the day, to settle at $80.44/Bbl.
>In contrast, NG prompt month (NOV 21) was up $0.085 on the day, to settle at $5.590/MMBtu.
Nice rebound today. Just a reminder: Six weeks ago Goldman Sachs was just about the only one of the Wall Street Gang forecasting $80 oil in Q4 and NOBODY was forecasting natural gas over $5.00.
I just finished listening to the replay of AEGIS webinar from October 7th.
I highly recommend that if you are investing in the gassers that you listen to that replay carefully.
Trading Economics: "WTI crude futures hovered around the $80 a barrel level on Wednesday, amid renewed concerns that a recent rally in energy prices and a global power crisis would hurt the global economy and bring oil demand down. Inflation in the US was higher-than-expected in September and OPEC revised its oil demand growth forecast down to 5.82 million bpd in 2021 from 5.96 million. Imports from China, the world's biggest crude importer, fell 15% from a year earlier in September. Still, oil prices remain close to levels not seen in 7 years due to energy shortages across the globe and restrained supplies from major producers. Traders now await crude inventories data for the US, delayed by a day following the Columbus Day holiday on Monday. API data is due later in the day and EIA is due tomorrow."
> WTI prompt month (NOV 21) was down $0.20 on the day, to settle at $80.44/Bbl.
>In contrast, NG prompt month (NOV 21) was up $0.085 on the day, to settle at $5.590/MMBtu.
Nice rebound today. Just a reminder: Six weeks ago Goldman Sachs was just about the only one of the Wall Street Gang forecasting $80 oil in Q4 and NOBODY was forecasting natural gas over $5.00.
I just finished listening to the replay of AEGIS webinar from October 7th.
I highly recommend that if you are investing in the gassers that you listen to that replay carefully.
Trading Economics: "WTI crude futures hovered around the $80 a barrel level on Wednesday, amid renewed concerns that a recent rally in energy prices and a global power crisis would hurt the global economy and bring oil demand down. Inflation in the US was higher-than-expected in September and OPEC revised its oil demand growth forecast down to 5.82 million bpd in 2021 from 5.96 million. Imports from China, the world's biggest crude importer, fell 15% from a year earlier in September. Still, oil prices remain close to levels not seen in 7 years due to energy shortages across the globe and restrained supplies from major producers. Traders now await crude inventories data for the US, delayed by a day following the Columbus Day holiday on Monday. API data is due later in the day and EIA is due tomorrow."
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Oct 13
https://www.cnn.com/2021/10/13/politics ... index.html
Biden administration announces plans for massive expansion of wind farms off US coasts
Biden administration announces plans for massive expansion of wind farms off US coasts
Re: Oil & Gas Prices - Oct 13
Like I said, their plan is to be spend trillions putting up more windmills that chop up seagulls and eagles on windy days
Re: Oil & Gas Prices - Oct 13
Wind and Solar generate electricity. They have NO IMPACT on crude oil demand, other than it will take a heck of a lot of oil based fuels to build and install them.
As is now becoming "painfully clear", the Green New Deal will increase demand for oil & gas and even coal in the short-term.
As is now becoming "painfully clear", the Green New Deal will increase demand for oil & gas and even coal in the short-term.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group