Oil & Gas Prices - Feb 16
Posted: Wed Feb 16, 2022 9:43 am
Opening Prices:
> WTI is up $1.23 to $93.30/bbl, and Brent is up $1.45 to $94.73/bbl.
> Natural gas is up 26.8c to $4.574/MMBtu.
AEGIS Notes
Oil
Oil prices rose Wednesday morning, recovering from its biggest one-day loss this year
> Traders weighed whether the Ukraine-Russia crisis was deescalating after Russia said it was pulling back some troops
> President Joe Biden said the U.S. hasn’t verified the claim and cautioned that an attack remains possible
The American Petroleum Institute reported yesterday that oil stocks at Cushing, Oklahoma fell 2.4 MMBbl last week
> If confirmed by governmental figures later on Wednesday, it is yet another sign of shrinking inventories at key hubs (BBG)
> The IEA urged OPEC and its allies to address their continued shortfall of providing oil to the globe
> Members need to fix the issue as the supply gap versus their target spirals toward 1 MBMbl/d, IEA Executive Director Fatih Birol told a conference in Riyadh (Bloomberg). “Hopefully (OPEC) will provide more volumes to the market in order to reduce volatility.”, Birol said
I wonder how long it will take IEA to realize that OPEC+ is tapped out. They aren't holding back production, they have just don't have any more easy oil to turn back on. To get more production they will need to drill a lot more wells.
Natural Gas
The prompt-month Henry Hub (Mar ‘22) contract is up 26.8c, near $4.574, as weather forecasts tilted cooler
> The February gas-weighted heating degree day forecast posted its largest increase since January 28, picking up 20 HDDs to 768 HDDs, its highest mark since Friday, February 4
> LNG feedgas demand is still around 13 Bcf/d, and Calcasieu Pass continues with its commissioning process, as flows hit a new record-high increasing by 400 MMcf/d
Permian gas production surges despite pledges of restraint from producers (Bloomberg)
> According to Bloomberg, Permian gas production is expected to rise by 14% in 2022, and another 8% in 2023
> Permian production averaged 12.2 Bcf/d in 2021 and is expected to average 13.9 Bcf/d in 2022, and 14.9 Bcf/d in 2023
> According to BNEF estimates, Permian wells can recover their cost in just over six months, with the Cal ’22 WTI oil strip trading above $84
> More wells being drilled for oil will increase "associated gas" production and fill pipelind capacity.
> AEGIS notes that Waha basis prices have deteriorated and are likely already pricing in increasing production
Go here for more details on the Waha natural gas takeaway issue:
https://aegis-hedging.com/insights/waha ... aints-loom
> WTI is up $1.23 to $93.30/bbl, and Brent is up $1.45 to $94.73/bbl.
> Natural gas is up 26.8c to $4.574/MMBtu.
AEGIS Notes
Oil
Oil prices rose Wednesday morning, recovering from its biggest one-day loss this year
> Traders weighed whether the Ukraine-Russia crisis was deescalating after Russia said it was pulling back some troops
> President Joe Biden said the U.S. hasn’t verified the claim and cautioned that an attack remains possible
The American Petroleum Institute reported yesterday that oil stocks at Cushing, Oklahoma fell 2.4 MMBbl last week
> If confirmed by governmental figures later on Wednesday, it is yet another sign of shrinking inventories at key hubs (BBG)
> The IEA urged OPEC and its allies to address their continued shortfall of providing oil to the globe
> Members need to fix the issue as the supply gap versus their target spirals toward 1 MBMbl/d, IEA Executive Director Fatih Birol told a conference in Riyadh (Bloomberg). “Hopefully (OPEC) will provide more volumes to the market in order to reduce volatility.”, Birol said
I wonder how long it will take IEA to realize that OPEC+ is tapped out. They aren't holding back production, they have just don't have any more easy oil to turn back on. To get more production they will need to drill a lot more wells.
Natural Gas
The prompt-month Henry Hub (Mar ‘22) contract is up 26.8c, near $4.574, as weather forecasts tilted cooler
> The February gas-weighted heating degree day forecast posted its largest increase since January 28, picking up 20 HDDs to 768 HDDs, its highest mark since Friday, February 4
> LNG feedgas demand is still around 13 Bcf/d, and Calcasieu Pass continues with its commissioning process, as flows hit a new record-high increasing by 400 MMcf/d
Permian gas production surges despite pledges of restraint from producers (Bloomberg)
> According to Bloomberg, Permian gas production is expected to rise by 14% in 2022, and another 8% in 2023
> Permian production averaged 12.2 Bcf/d in 2021 and is expected to average 13.9 Bcf/d in 2022, and 14.9 Bcf/d in 2023
> According to BNEF estimates, Permian wells can recover their cost in just over six months, with the Cal ’22 WTI oil strip trading above $84
> More wells being drilled for oil will increase "associated gas" production and fill pipelind capacity.
> AEGIS notes that Waha basis prices have deteriorated and are likely already pricing in increasing production
Go here for more details on the Waha natural gas takeaway issue:
https://aegis-hedging.com/insights/waha ... aints-loom