Oil & Gas Prices - Jan 3

[dan_s]

Opening Prices:
> WTI is down 50c to $74.71/Bbl, and Brent is down 26c to $77.52/Bbl.
> Natural gas is down 2.7c to $3.703/MMBtu.

AEGIS Notes
Oil

WTI is down 50c to $74.71/Bbl, and Brent is down 26c to $77.52/Bbl this morning
> An OPEC+ report from Sunday shows the cartel sees the impact of Omicron being mild and temporary, keeping the door open for another production increase
> The Organization of the Petroleum Exporting Countries will meet on Monday at 1300 GMT to discuss the appointment of a new secretary general to succeed Nigeria's Mohammad Barkindo, according to Reuters. The Joint Technical Committee will also meet today to discuss current market fundamentals
> The group's main meeting will be held on Tuesday, where they will debate whether to proceed with unwinding cuts by 400 MBbl/d < This is what I expect them to announce, but for at least three months OPEC+ production has been less than their official quotas. More than half of the cartel members are already at max production.

Libya shuts down 200 MBbl/d of production
> The latest outage comes only two weeks after militias shut down the country's largest field, Sharara, knocking the countries production 350 MBbl/d lower
> The closure has brought Libyan production down to around 700 MBbl/d, its lowest in over a year
> Libya's state-owned National Oil Corp said the pipeline would be working again in a week

Natural Gas

Prompt month prices are down by 5.1c from Friday’s close to $3.679/MMbtu
> Total gas demand in the U.S. is forecast to hit a winter-season high of 114 Bcf/d today and hit even higher levels later in the week
> Production volumes took a near 5 Bcf/d dip over the new year to 91.4 Bcf/d on 1/2, before recovering to 93.3 Bcf/d today
> Weather runs saw the lower 48 lose 7.1 HDDs from yesterday, but only a net loss of 3 from Friday

The Yamal-Europe pipeline sent gas from Germany to Poland for a 14th straight day Sunday according to Gascade
> The pipeline accounts for one-sixth of Russia’s normal gas exports west to Europe
> Russian President Vladimir Putin put the blame on German gas importers

Indonesia, one of the world’s largest coal exporters, has paused coal shipments in January to secure dwindling supplies for domestic power plants
> The move could increase LNG needs from China, India, Japan, and South Korea, which together received 73% of Indonesian coal exports in 2021 according to Engie EnergyScan < This world is in an "Energy Crisis" that will get a lot worse this summer.
The US and Canada are extremely fortunate to have adequate coal and natural gas supplies.

Global LNG exports jumped to a record last month as new projects ratcheted up output and utilities boosted imports to restock inventories (Bloomberg)
> The U.S. Qatar, and Australia, the world’s top three exporters of the super-chilled fuel - all boosted output in December compared to the previous year