Oil & Gas Prices - Jan 12

[dan_s]

Opening Prices:
> WTI is up 92c to $82.14/Bbl, and Brent is up 62c to $84.34/Bbl.
> Natural gas is up 18.5c to $4.434/MMBtu. < Thanks to Old Man Winter

AEGIS Notes

Oil

Oil prices rallied 3.8% on Tuesday as the Federal Reserve calmed expectations of tighter policy, and oil inventories are expected to show a decline for last week (Bloomberg)
> Fed Chair Jerome Powell tried to reassure markets that the central bank could rein in inflation without damaging the economy

Oman’s oil minister, a member of OPEC+, said OPEC and its allies don’t want crude prices to climb to $100/Bbl and are reviving production quickly enough to prevent global markets from “overheating”

U.S. oil output is set to rise to a record level next year as producers increase activity, according to the EIA’s monthly Short-Term Energy Outlook
Oil supply will average 12.41 MMBbl/d in 2023, according to the EIA
The current high water mark was 12.3 MMBbl/d set in 2019 < Peak month was Nov 2019 at 12,860,000/day

Ngas

Natural gas is up 21c this morning, near $4.437
The overnight weather model runs were encouraging, particularly in the 11-15 day range, where several regions are expected to see significantly cooler temperatures
Even more encouraging, the weather improvements were in gas-weighted areas of the country, leading the January gas-weighted heating degree day forecast to post its most significant gain since January 1. The total increased by 19 HDDs to 978 HDDs, which is also its highest forecasted total so far
The weekly lower-48 average temperatures are set to come in as the coldest of the season each week through the end of the month. The current forecasts are 41.4 °F, 38.6 °F and 34.9 °F for the weeks ending January 14, January 21, and January 28
U.S. lower-48 dry gas production has also been slow to recover from the fall observed heading into the end of December, which has added to the bullish sentiment surrounding gas prices

EIA forecast lower gas prices through 2023 as production, LNG exports rise
Henry Hub spot prices averaged $3.91 in ’21, and the EIA forecast they will average $3.79 in ‘22 and $3.63 in ‘23
The EIA sees U.S. dry gas production growing by 2.5 Bcf/d in ’22 to average 96.0 Bcf/d, and then 1.6 Bcf/d to 97.6 Bcf/d in ’23. The agency reported that production increased by 2.0 Bcf/d in ’21 to 93.5 Bcf/d
The EIA also said they see end-of-season (March ’22) storage exiting at 1.8 Tcf, which would be 8% higher than the five-year average