Oil & Gas Prices - Feb 3
Posted: Thu Feb 03, 2022 10:22 am
Opening Prices:
> WTI is down 82c to $87.44/Bbl, and Brent is down 73c to $88.74/Bbl.
> Natural gas is down 50.0c to $5.001/MMBtu.
AEGIS Notes
Oil
Oil futures traded lower Thursday morning as the market digests OPEC+’s decision to raise output, and equity markets came under selling pressure
> OPEC+ agreed to lift output yesterday for March. However, the group has not been able to keep up with current quotas, casting doubt on their ability to achieve further increases < It is just starting to sink in that OPEC+ production has peaked. Their "official quotas" mean nothing for all but a few of the cartel members.
> Oil prices are headed for a seventh weekly gain, with multiple Wall Street banks calling for triple digit crude
Traders continue to monitor the situation in Ukraine amid concerns that Russia may invade (BBG)
> An incursion by Russia could potentially upend oil and gas flows
> Oil historian Daniel Yergin said further escalation over Ukraine could send prices to $100/Bbl, according to Bloomberg
> Last week, Citibank said there was likely already a $5/Bbl geopolitical risk premium built into the crude market
Natural gas
Gas prices are retreating this morning after posting huge gains during yesterdays trading session
> The prompt contract is down by 50c, and the Summer ’22 strip is down by 20c
> The February gas-weighted heating degree day forecast was nearly unchanged, rising 0.1 HDDs to 781.9 HDDs
Lower-48 dry gas production posted a 2.3 Bcf/d decline to 89.8 as the winter storm has caused more freeze-offs, particularly in the Permian basin
> Wind generation is at a two-week high of 70 GW
> LNG feedgas demand is at around 12.5 Bcf/d this morning, after falling to 11.7 Bcf/d earlier in the week
> Venture Global reportedly produced its first cargo at its Calcasieu Pass facility last Friday – Criterion Research
The EIA is expected to report a 278-Bcf draw for the week ending Jan 28
Japan mulls U.S. request to divert LNG imports to Europe
> The European Union imports about a third of its gas from Russia, which could be cut off if war breaks out
> Russia has amassed over 100,000 troops on Ukraine’s border, raising alarms in the West.
> U.S. President Joe Biden sent 3,000 troops to Poland, Germany, and Romania in response to the escalations
-------------------------------
Oil and gas prices are way above what I am using in my forecast models. I will be increasing the commodity prices in my forecast models when I update them for Q4 actual results and fresh 2022 guidance. For now just consider the valuations in the January 31st newsletter to be "conservative". Just remember that the NYMEX futures strip is not a forecast.
> WTI is down 82c to $87.44/Bbl, and Brent is down 73c to $88.74/Bbl.
> Natural gas is down 50.0c to $5.001/MMBtu.
AEGIS Notes
Oil
Oil futures traded lower Thursday morning as the market digests OPEC+’s decision to raise output, and equity markets came under selling pressure
> OPEC+ agreed to lift output yesterday for March. However, the group has not been able to keep up with current quotas, casting doubt on their ability to achieve further increases < It is just starting to sink in that OPEC+ production has peaked. Their "official quotas" mean nothing for all but a few of the cartel members.
> Oil prices are headed for a seventh weekly gain, with multiple Wall Street banks calling for triple digit crude
Traders continue to monitor the situation in Ukraine amid concerns that Russia may invade (BBG)
> An incursion by Russia could potentially upend oil and gas flows
> Oil historian Daniel Yergin said further escalation over Ukraine could send prices to $100/Bbl, according to Bloomberg
> Last week, Citibank said there was likely already a $5/Bbl geopolitical risk premium built into the crude market
Natural gas
Gas prices are retreating this morning after posting huge gains during yesterdays trading session
> The prompt contract is down by 50c, and the Summer ’22 strip is down by 20c
> The February gas-weighted heating degree day forecast was nearly unchanged, rising 0.1 HDDs to 781.9 HDDs
Lower-48 dry gas production posted a 2.3 Bcf/d decline to 89.8 as the winter storm has caused more freeze-offs, particularly in the Permian basin
> Wind generation is at a two-week high of 70 GW
> LNG feedgas demand is at around 12.5 Bcf/d this morning, after falling to 11.7 Bcf/d earlier in the week
> Venture Global reportedly produced its first cargo at its Calcasieu Pass facility last Friday – Criterion Research
The EIA is expected to report a 278-Bcf draw for the week ending Jan 28
Japan mulls U.S. request to divert LNG imports to Europe
> The European Union imports about a third of its gas from Russia, which could be cut off if war breaks out
> Russia has amassed over 100,000 troops on Ukraine’s border, raising alarms in the West.
> U.S. President Joe Biden sent 3,000 troops to Poland, Germany, and Romania in response to the escalations
-------------------------------
Oil and gas prices are way above what I am using in my forecast models. I will be increasing the commodity prices in my forecast models when I update them for Q4 actual results and fresh 2022 guidance. For now just consider the valuations in the January 31st newsletter to be "conservative". Just remember that the NYMEX futures strip is not a forecast.