Oil & Gas Prices - Jan 27
Posted: Thu Jan 27, 2022 10:34 am
Opening Prices:
> WTI is up 78c to $88.13/Bbl, and Brent is up 76c to $90.72/Bbl.
> Natural gas is up 2.3c to $4.300/MMBtu.
AEGIS Notes
Oil
Brent crude hit a fresh seven-year high at $91/Bbl as bullish crude fundamentals outweigh a more hawkish Fed (BBG)
> The recent rally in oil comes as physical supplies appear extremely tight
> Yesterday the Fed supported starting to raise interest rates in March and opened the door to more frequent, potentially larger hikes than expected
A Geopolitical premium in oil remains as traders keep an eye on events in Ukraine
> Russia has denied plans to invade, but Citigroup estimates that the conflict has added at least $5/Bbl of risk premium
Gasoline futures are at the highest premium to crude for this time of year since 2013 as refiners struggle to build supply ahead of summer (Bloomberg)
> Nymex gasoline is trading at around $18.50/Bbl above crude
> PADD 3 refiners (U.S. Gulf Coast) are undergoing a heavier-than-usual turnaround season, with many shutting down gasoline units for maintenance
> The supply shortfall is “more than the market can absorb,” says John Auers, executive vice president at Turner Mason
Natural Gas
U.S. natural gas prices are up this morning
> The EIA is expected to report a 213-Bcf draw for the week ending January 21, in contrast with the five-year average draw of 161 Bcf
> Estimates ranged from a low of -198 Bcf to a high of -225 Bcf
> AEGIS notes that the stat would put U.S. Gas inventory levels 20-Bcf below the five-year average
> The end-of-season inventory level being traded on ICE is around 1.44 Tcf, a week-over-week decline of about 20 Bcf
Nord Stream 2 opens German subsidiary to gain regulatory approval, Ukraine situation leaves pipeline's fate uncertain
> Germany's Federal Network Agency energy regulator announced in November that it had suspended the certification process, saying Swiss-based Nord Stream 2 A.G. must first form a legal entity in Germany
> Russia-Ukraine tensions have continued to mount, and U.S. state department spokesman Ned Price said on Wednesday that NS2 would not move forward if Russia invades Ukraine
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MY TAKE: The energy crisis in Europe will become a global energy crisis within a few months.
> $100 WTI is now possible within two months and probable within four months
> Diesel inventories are way too low, adding difficulty to the supply chain issues. Make sure you have adequate food supplies.
> OPEC+ including Russia are at or very near running out of spare capacity
> Major winter storm will hit the Northeast this weekend. Power outages from Washington, DC to Miane are expected.
> WTI is up 78c to $88.13/Bbl, and Brent is up 76c to $90.72/Bbl.
> Natural gas is up 2.3c to $4.300/MMBtu.
AEGIS Notes
Oil
Brent crude hit a fresh seven-year high at $91/Bbl as bullish crude fundamentals outweigh a more hawkish Fed (BBG)
> The recent rally in oil comes as physical supplies appear extremely tight
> Yesterday the Fed supported starting to raise interest rates in March and opened the door to more frequent, potentially larger hikes than expected
A Geopolitical premium in oil remains as traders keep an eye on events in Ukraine
> Russia has denied plans to invade, but Citigroup estimates that the conflict has added at least $5/Bbl of risk premium
Gasoline futures are at the highest premium to crude for this time of year since 2013 as refiners struggle to build supply ahead of summer (Bloomberg)
> Nymex gasoline is trading at around $18.50/Bbl above crude
> PADD 3 refiners (U.S. Gulf Coast) are undergoing a heavier-than-usual turnaround season, with many shutting down gasoline units for maintenance
> The supply shortfall is “more than the market can absorb,” says John Auers, executive vice president at Turner Mason
Natural Gas
U.S. natural gas prices are up this morning
> The EIA is expected to report a 213-Bcf draw for the week ending January 21, in contrast with the five-year average draw of 161 Bcf
> Estimates ranged from a low of -198 Bcf to a high of -225 Bcf
> AEGIS notes that the stat would put U.S. Gas inventory levels 20-Bcf below the five-year average
> The end-of-season inventory level being traded on ICE is around 1.44 Tcf, a week-over-week decline of about 20 Bcf
Nord Stream 2 opens German subsidiary to gain regulatory approval, Ukraine situation leaves pipeline's fate uncertain
> Germany's Federal Network Agency energy regulator announced in November that it had suspended the certification process, saying Swiss-based Nord Stream 2 A.G. must first form a legal entity in Germany
> Russia-Ukraine tensions have continued to mount, and U.S. state department spokesman Ned Price said on Wednesday that NS2 would not move forward if Russia invades Ukraine
-------------------------------
MY TAKE: The energy crisis in Europe will become a global energy crisis within a few months.
> $100 WTI is now possible within two months and probable within four months
> Diesel inventories are way too low, adding difficulty to the supply chain issues. Make sure you have adequate food supplies.
> OPEC+ including Russia are at or very near running out of spare capacity
> Major winter storm will hit the Northeast this weekend. Power outages from Washington, DC to Miane are expected.