Oil & Gas Prices - Mar 22
Posted: Tue Mar 22, 2022 9:33 am
Opening Prices:
> WTI is up $0.70 to $112.82/bbl, and Brent is up $1.10 to $116.72/bbl.
> Natural gas is up 12.5c to $5.025/MMBtu.
AEGIS Notes
Oil
WTI futures touched $115/Bbl this morning as crude oil remains volatile
> Brent’s volatility stands at a 22-month high
> Oil’s volatility has sapped liquidity from the market
> There are signs traders have been stepping back from the wild price fluctuations by reducing their holdings of futures contracts (Bloomberg)
Oil prices rose $8/Bbl yesterday as the EU was considering an oil embargo on Russia (BBG)
> There is a lack of consensus in the EU over whether to target Russian oil
> Germany is reliant on Russian crude imports and has so far rejected calls for a ban. Hungary is also opposed
> Leaders from the EU are set to meet Thursday, and any decision would need to be agreed upon by all 27 states < MY TAKE: Several countries know they cannot survive long without Russian oil. I will be surprised if they agree to ban the critical energy supplies coming from Russia, but the political pressure is mounting as citizens day-after-day see the bombings, destruction and death in Ukraine.
Natural Gas < Very bullish for AR, CTRA, CRK, EQT, RRC and SBOW
U.S. gas futures are up this morning, with the prompt contract gaining 12.5c to around $5.025
> Overnight weather forecasts improved with the March gas-weighted heating degree day forecast posting an 8.9 HDD gain, to bring the total to 548.3
> Lower-48 dry gas production has held near 93.0 Bcf/d, nearly 1 Bcf/d removed from its March high of 94 Bcf/d
Russia-related energy market shock could tip the world into recession, Vitol CEO says
> Vitol’s CEO said that if the war drags on and energy prices remain elevated, chances of a global recession increase
> The world’s leading independent trader of crude oil and products estimates that 2-3 MMBbl/d of oil could be lost, driving up prices and causing buyers to switch to other fuel sources when available < Germans will be burning furniture for space heating next winter if Putin cuts off their oil & gas.
> European gas prices had already risen in the months leading up to the invasion, prompting governments to spend billions on tax breaks and subsidies to shield citizens from the costs
> The EU has agreed to jointly buy gas and LNG jointly this year to combat higher prices and refill inventories < If demand for US LNG keeps exports near capacity, I now think HH gas prices will average more than $5/MMBtu and may go much higher than that if ngas inventories remain below the 5-year average month-after-month.
> WTI is up $0.70 to $112.82/bbl, and Brent is up $1.10 to $116.72/bbl.
> Natural gas is up 12.5c to $5.025/MMBtu.
AEGIS Notes
Oil
WTI futures touched $115/Bbl this morning as crude oil remains volatile
> Brent’s volatility stands at a 22-month high
> Oil’s volatility has sapped liquidity from the market
> There are signs traders have been stepping back from the wild price fluctuations by reducing their holdings of futures contracts (Bloomberg)
Oil prices rose $8/Bbl yesterday as the EU was considering an oil embargo on Russia (BBG)
> There is a lack of consensus in the EU over whether to target Russian oil
> Germany is reliant on Russian crude imports and has so far rejected calls for a ban. Hungary is also opposed
> Leaders from the EU are set to meet Thursday, and any decision would need to be agreed upon by all 27 states < MY TAKE: Several countries know they cannot survive long without Russian oil. I will be surprised if they agree to ban the critical energy supplies coming from Russia, but the political pressure is mounting as citizens day-after-day see the bombings, destruction and death in Ukraine.
Natural Gas < Very bullish for AR, CTRA, CRK, EQT, RRC and SBOW
U.S. gas futures are up this morning, with the prompt contract gaining 12.5c to around $5.025
> Overnight weather forecasts improved with the March gas-weighted heating degree day forecast posting an 8.9 HDD gain, to bring the total to 548.3
> Lower-48 dry gas production has held near 93.0 Bcf/d, nearly 1 Bcf/d removed from its March high of 94 Bcf/d
Russia-related energy market shock could tip the world into recession, Vitol CEO says
> Vitol’s CEO said that if the war drags on and energy prices remain elevated, chances of a global recession increase
> The world’s leading independent trader of crude oil and products estimates that 2-3 MMBbl/d of oil could be lost, driving up prices and causing buyers to switch to other fuel sources when available < Germans will be burning furniture for space heating next winter if Putin cuts off their oil & gas.
> European gas prices had already risen in the months leading up to the invasion, prompting governments to spend billions on tax breaks and subsidies to shield citizens from the costs
> The EU has agreed to jointly buy gas and LNG jointly this year to combat higher prices and refill inventories < If demand for US LNG keeps exports near capacity, I now think HH gas prices will average more than $5/MMBtu and may go much higher than that if ngas inventories remain below the 5-year average month-after-month.