Energy Prospectus

Opening Prices (NOV21)
> The front month NYMEX contract for WTI opened at $81.48, $0.17/bbl higher than Thursday's close.
> The NOV21 contract for HH natural gas opened at $5.641, $0.046/MMBtu lower than Thursday's close.

Trading Economics: "WTI crude futures were up around 1% to the $82 a barrel level on Friday, a fresh 7-year high, and are on track to book a 3% gain on the week, as shortages of natural gas in Europe and Asia continue to boost demand for oil and supply tightness persist. The IEA said on Thursday the energy crunch is expected to boost oil demand by 500,000 bpd. On the supply side, the EIA said that crude oil output in the US is going to drop in 2021 more than previously forecast but EIA thinks output will bounce back in 2022. Meanwhile, the agency reported an increase of 6.088 million barrels of crude in the US last week, almost 6 times higher than market expectations."

Trading Economics: "Natural gas futures went down to $5.6 per million British thermal units on Friday, as demand for next week is seen lower-than-expected as the weather will likely remain mild until the end of October. Still, gas prices remain elevated and not far from a seven-year high of $6.5 hit earlier in the month, amid strong demand during the winter heating season and depleted inventory levels, especially in Europe and Asia. The EIA forecasts that natural gas prices at the US benchmark Henry Hub will average $5.67 per million British thermal units between October and March, the highest winter price since 2007–2008."

If natural gas prices average $5.67 in Q4 and Q1 the gassers are going to have a pile of cash by Easter.

Goldman Sachs forecasts that Brent will go over $90/bbl by December.

LONDON (Reuters) -Oil prices hit a fresh three-year high on Friday, with Brent climbing above $85 a barrel on forecasts of a supply deficit over the next few months as rocketing natural gas and coal prices stoke a switch to oil products.

Brent crude futures were up 82 cents, or 0.98%, at $84.82 a barrel at 1333 GMT. Front-month prices, which earlier touched their highest since October 2018 at $85.10, are set to climb for the sixth straight week, heading for a 3% hike this week.

U.S. West Texas Intermediate (WTI) crude futures rose 81 cents, or 1%, to $82.12 a barrel. The contract is heading for a 3.5% gain on the week, up for the eighth consecutive week.

Strong stock markets on both sides of the Atlantic, often traced by oil prices, also gave a boost.

KEY STAT: Analysts pointed to a sharp drop in OECD oil stockpiles to their lowest level since 2015. Demand has picked up with the recovery from the COVID-19 pandemic, with a further boost coming from industry turning away from expensive gas and coal to fuel oil and diesel for power.

"The fact that Asian markets are content to chase prices higher at weekly highs, instead of lurking on price dips, is a strong signal that energy demand remains robust," OANDA senior analyst Jeffrey Halley said in a note.

The International Energy Agency on Thursday said the energy crunch is expected to boost oil demand by 500,000 barrels per day (bpd).

That would result in a supply gap of around 700,000 bpd through the end of this year, until the Organization of the Petroleum Countries and allies, together called OPEC+, add more supply, as planned in January.

Investors shrugged off a higher than expected gain in U.S. crude stocks last week as refinery crude runs fell.

Crude inventories rose by 6.1 million barrels in the week to Oct. 8 to 427 million barrels, compared with analysts' expectations in a Reuters poll for a 702,000-barrel rise, the Energy Information Administration said on Thursday.

Closing Prices:
> WTI closed at $82.39/bbl, up $1.08 for the day.
> HH natural gas closed at $5.408, down $0.233 for the day.