Oil & Gas Prices - Mar 29
Posted: Tue Mar 29, 2022 9:15 am
Opening Prices:
> WTI is down $6.37 to $99.59/bbl, and Brent is down $6.46 to $106.02/bbl.
> Natural gas is down -21.4c to $5.294/MMBtu.
AEGIS Notes
Oil
Oil prices fell over 5% as Russia said it would sharply cut military operations near Kyiv
> Russia’s defense minister said his country would reduce military action near Kyiv and Chernihiv following negotiations aimed at de-escalating the war < It is great news that the war in Ukraine might be ending. My GUESS is that Putin will remain in control of the eastern third of the country. My hope is that NATO now understands that Russia does not want NATO countries on their border. Just like we would not want a Chinese controlled country on our border.
> Tuesday morning’s losses follow an almost $8/Bbl decline on Monday < Volatility will continue in the price of oil, but the global market is still "short oil" and geopolitical risk is still high. Team Biden should walk away from the Iran deal and focus on a way to solve the situation in Venezuela, so we can get the heavy oil that we need. Allowing the Keystone XL pipeline to be built would also be a step in the right direction.
The WTI Midland crude differential rallied the most since April 2020 on Monday (Bloomberg)
> The Midland cash spread to Cushing rose 90c/Bbl to +$1.20/Bbl yesterday
> West Texas oil strength comes as prices of the benchmark at Cushing come under intense selling pressure
OPEC leaders said the U.S. must trust OPEC+’s strategy, as consuming nations call on OPEC to boost production
> UAE energy minister said, “we know what we’re doing”
> OPEC+ meets on Thursday to decide on output levels for May
> The group so far have signaled they see no need to divert from their policy of small increases in output per month < IMO they are sticking with "their policy" because they have no choice. OPEC+ actual production has been below their official quotas for five months or more. Most of the OPEC cartel countries are tapped out and some have falling production. Five OPEC countries reported productions declines from January to February.
Natural Gas
U.S. gas futures are down this morning, with the prompt contract trading 21.4c lower near $5.294 as it heads for expiry
> U.S. lower-48 dry gas production held above 93 Bcf/d over the weekend
> U.S. LNG feedgas demand is at around 13.0 Bcf/d
> Weather forecasts have been steady, holding on to the demand gains from last week
Russia says it will not deliver gas for free, will accept payment in roubles
> Russia issued a demand last week that “unfriendly” states should pay for its gas in roubles, rather than euros
> The Russian central bank, the government, and Gazprom, which accounts for 40% of European gas imports, should present their proposals for rouble gas payments to President Vladimir Putin by March 31
> All G7 ministers agreed that the demand was a breach of contract and would warrant further action if flows are interrupted < Europe needs to reduce their dependency on Russia for energy supply.
> WTI is down $6.37 to $99.59/bbl, and Brent is down $6.46 to $106.02/bbl.
> Natural gas is down -21.4c to $5.294/MMBtu.
AEGIS Notes
Oil
Oil prices fell over 5% as Russia said it would sharply cut military operations near Kyiv
> Russia’s defense minister said his country would reduce military action near Kyiv and Chernihiv following negotiations aimed at de-escalating the war < It is great news that the war in Ukraine might be ending. My GUESS is that Putin will remain in control of the eastern third of the country. My hope is that NATO now understands that Russia does not want NATO countries on their border. Just like we would not want a Chinese controlled country on our border.
> Tuesday morning’s losses follow an almost $8/Bbl decline on Monday < Volatility will continue in the price of oil, but the global market is still "short oil" and geopolitical risk is still high. Team Biden should walk away from the Iran deal and focus on a way to solve the situation in Venezuela, so we can get the heavy oil that we need. Allowing the Keystone XL pipeline to be built would also be a step in the right direction.
The WTI Midland crude differential rallied the most since April 2020 on Monday (Bloomberg)
> The Midland cash spread to Cushing rose 90c/Bbl to +$1.20/Bbl yesterday
> West Texas oil strength comes as prices of the benchmark at Cushing come under intense selling pressure
OPEC leaders said the U.S. must trust OPEC+’s strategy, as consuming nations call on OPEC to boost production
> UAE energy minister said, “we know what we’re doing”
> OPEC+ meets on Thursday to decide on output levels for May
> The group so far have signaled they see no need to divert from their policy of small increases in output per month < IMO they are sticking with "their policy" because they have no choice. OPEC+ actual production has been below their official quotas for five months or more. Most of the OPEC cartel countries are tapped out and some have falling production. Five OPEC countries reported productions declines from January to February.
Natural Gas
U.S. gas futures are down this morning, with the prompt contract trading 21.4c lower near $5.294 as it heads for expiry
> U.S. lower-48 dry gas production held above 93 Bcf/d over the weekend
> U.S. LNG feedgas demand is at around 13.0 Bcf/d
> Weather forecasts have been steady, holding on to the demand gains from last week
Russia says it will not deliver gas for free, will accept payment in roubles
> Russia issued a demand last week that “unfriendly” states should pay for its gas in roubles, rather than euros
> The Russian central bank, the government, and Gazprom, which accounts for 40% of European gas imports, should present their proposals for rouble gas payments to President Vladimir Putin by March 31
> All G7 ministers agreed that the demand was a breach of contract and would warrant further action if flows are interrupted < Europe needs to reduce their dependency on Russia for energy supply.