Oil & Gas Prices - Dec 7
Posted: Tue Dec 07, 2021 9:50 am
Opening Prices:
> WTI is up $1.82 to $71.31/Bbl, and Brent is up $1.57 to $74.65/Bbl.
> Natural gas is up 7.2c to $3.729/MMBtu.
AEGIS Notes
Oil
Oil prices continued to rise Tuesday on optimism that the new covid variant may not be as severe as feared
> West Texas Intermediate traded near $72/Bbl this morning, up from last week’s intraday low near $62/Bbl
> Citibank on Tuesday said it is bullish on oil prices in the short-term
> Saudi Arabia’s move on Sunday to increase the price of its crude for January gave the market confidence that the consumption outlook would remain robust (Bloomberg)
The selloff in oil prices was negative gamma in a low liquidity market (Goldman, Bloomberg)
> The plunge in oil prices “pushed cal 2022 WTI between $65 and $60, a region containing the strike prices of many of the put options sold by producers to hedge their oil price risk,” Goldman’s Jeff Currie wrote in a note December 3
> “While the catalyst for the selloff was fundamental, the scale and shape of moves in the crude futures curves implies technical factors were also at play”
> The so-called negative gamma effects are where options traders are forced to sell futures contracts to hedge their risk (Bloomberg)
Natural Gas
Jan ’22 gas is up by around 7.2c this morning, near $3.72, after posting a 47c loss yesterday to finish at a five-month low
> Weather models showed the first gain in gas-weighted heating degree days since Friday, gaining 11.1 HDDs to 734.1
> This morning pipeline nominations show U.S. Lower-48 dry gas production is down by nearly 1 Bcf/d at 94.1 Bcf/d
> Most of the fall in output can be attributed to the 0.7 Bcf/d drop in the Marcellus/Utica regions < Very cold weather often forces upstream companies to shut-in wells in this region.
> This morning, LNG feedgas demand is down by 0.88 Bcf/d after staying above 12 Bcf/d for four consecutive days. Sabine Pass deliveries fell by 0.61 Bcf/d
A Virginia Department of Environmental Quality (DEQ) panel denied a key permit for a compressor station needed for the Mountain Valley Pipeline Southgate Extension
> The vote was against the DEQ’s recommendation, which, if passed, would have allowed developers to proceed with the Lambert Compressor Station, a key link to extend the pipeline into North Carolina
> The ruling will have no impact on the Mountain Valley Pipeline, which will transport nearly 2 Bcf/d from West Virginia to a Transco Gas pipeline interconnect in SW Virginia
> WTI is up $1.82 to $71.31/Bbl, and Brent is up $1.57 to $74.65/Bbl.
> Natural gas is up 7.2c to $3.729/MMBtu.
AEGIS Notes
Oil
Oil prices continued to rise Tuesday on optimism that the new covid variant may not be as severe as feared
> West Texas Intermediate traded near $72/Bbl this morning, up from last week’s intraday low near $62/Bbl
> Citibank on Tuesday said it is bullish on oil prices in the short-term
> Saudi Arabia’s move on Sunday to increase the price of its crude for January gave the market confidence that the consumption outlook would remain robust (Bloomberg)
The selloff in oil prices was negative gamma in a low liquidity market (Goldman, Bloomberg)
> The plunge in oil prices “pushed cal 2022 WTI between $65 and $60, a region containing the strike prices of many of the put options sold by producers to hedge their oil price risk,” Goldman’s Jeff Currie wrote in a note December 3
> “While the catalyst for the selloff was fundamental, the scale and shape of moves in the crude futures curves implies technical factors were also at play”
> The so-called negative gamma effects are where options traders are forced to sell futures contracts to hedge their risk (Bloomberg)
Natural Gas
Jan ’22 gas is up by around 7.2c this morning, near $3.72, after posting a 47c loss yesterday to finish at a five-month low
> Weather models showed the first gain in gas-weighted heating degree days since Friday, gaining 11.1 HDDs to 734.1
> This morning pipeline nominations show U.S. Lower-48 dry gas production is down by nearly 1 Bcf/d at 94.1 Bcf/d
> Most of the fall in output can be attributed to the 0.7 Bcf/d drop in the Marcellus/Utica regions < Very cold weather often forces upstream companies to shut-in wells in this region.
> This morning, LNG feedgas demand is down by 0.88 Bcf/d after staying above 12 Bcf/d for four consecutive days. Sabine Pass deliveries fell by 0.61 Bcf/d
A Virginia Department of Environmental Quality (DEQ) panel denied a key permit for a compressor station needed for the Mountain Valley Pipeline Southgate Extension
> The vote was against the DEQ’s recommendation, which, if passed, would have allowed developers to proceed with the Lambert Compressor Station, a key link to extend the pipeline into North Carolina
> The ruling will have no impact on the Mountain Valley Pipeline, which will transport nearly 2 Bcf/d from West Virginia to a Transco Gas pipeline interconnect in SW Virginia