Oil & Gas Prices - Mar 30
Posted: Wed Mar 30, 2022 8:58 am
Opening Prices:
> WTI is up $3.00 to $107.24/bbl, and Brent is up $2.85 to $113.08/bbl.
> Natural gas is up 6.7c to $5.403/MMBtu.
AEGIS Notes
Oil
WTI futures rose to $107 following more than an 8% loss over the past two sessions
> The market remains volatile as investors assess the outlook for a de-escalation of Russia’s war in Ukraine
> Russia has offered to “fundamentally cut back” its military operations in northern Ukraine. But, a person close to the Kremlin said that doesn’t mean a cease-fire or a complete withdrawal of troops from around Kyiv (Bloomberg)
Oil output from Russia is showing signs of decline
> Output from March 16-27 dropped below 11 MMBbl/d, a level not seen since the beginning of the year, according to Bloomberg calculations
> Crude deliveries to the nation’s refineries were down 11%, and exports to crucial markets were down by nearly 20%
> Supply is starting to show a “significant decline relative to the beginning of the month,” consultant OilX said in a note
OPEC and its allies will meet this week to discuss its production policy
> Most analysts expect the group to reject calls from oil-consuming nations to replace lost Russian barrels
> The group will most likely ratify plans for another modest production increase for May
MY TAKE: OPEC+ has not been able to produce oil up to their official quotas for months. They are rejecting calls to increase production because they have very little production capacity remaining. Plus, Saudi Arabia doesn't care what Oil Joe wants. They are pissed that Team Biden is even considering lifting sanctions on Iran.
Natural Gas
April ’22 gas expired yesterday at $5.336. May ’22 gas is up by around 6.7c this morning, near $5.403, in its first session as the prompt contract
> U.S. lower-48 dry gas production is still above 93 Bcf/d
> U.S. LNG feedgas demand is down by 0.5 Bcf/d around 12.0 Bcf/d. The decline in flows can be attributed to drops at Sabine Pass LNG and Freeport LNG
> Weather forecasts have weakened since Saturday, with the April ’22 gas-weighted heating degree day forecast falling from 349 HDDs on Saturday, to 329 HDDs on Wednesday
> In response to cooler weather in the Northeast, Canadian imports have jumped this week. According to pipeline nominations, current imports of Canadian gas are at 9.5 Bcf/d, its highest mark since January
Russia will not immediately demand buyers to pay for its gas in Roubles
> Germany triggered an emergency plan to manage gas supplies in response to a standoff over a Russian demand to pay for fuel with roubles or halt supplies
> The demand for payment in roubles is in retaliation for the West imposing crippling sanctions on Russia for its invasion of Ukraine
> The Kremlin signaled on Wednesday it could widen the demand for rouble payments to other commodities, including oil, grain, fertilizers, coal, and metals, raising the threat of recession in the United States and Europe, where inflation is already skyrocketing
> AEGIS notes any disruptions to gas flows could send European prices higher, as the continent is already facing an energy shortage
MY TAKE: The most recent prices for LNG that I see are $33.01/MMBtu in Europe (Dutch TTF price) and $33.97/MMBtu in Asia (Japan/Korea Marker).
> WTI is up $3.00 to $107.24/bbl, and Brent is up $2.85 to $113.08/bbl.
> Natural gas is up 6.7c to $5.403/MMBtu.
AEGIS Notes
Oil
WTI futures rose to $107 following more than an 8% loss over the past two sessions
> The market remains volatile as investors assess the outlook for a de-escalation of Russia’s war in Ukraine
> Russia has offered to “fundamentally cut back” its military operations in northern Ukraine. But, a person close to the Kremlin said that doesn’t mean a cease-fire or a complete withdrawal of troops from around Kyiv (Bloomberg)
Oil output from Russia is showing signs of decline
> Output from March 16-27 dropped below 11 MMBbl/d, a level not seen since the beginning of the year, according to Bloomberg calculations
> Crude deliveries to the nation’s refineries were down 11%, and exports to crucial markets were down by nearly 20%
> Supply is starting to show a “significant decline relative to the beginning of the month,” consultant OilX said in a note
OPEC and its allies will meet this week to discuss its production policy
> Most analysts expect the group to reject calls from oil-consuming nations to replace lost Russian barrels
> The group will most likely ratify plans for another modest production increase for May
MY TAKE: OPEC+ has not been able to produce oil up to their official quotas for months. They are rejecting calls to increase production because they have very little production capacity remaining. Plus, Saudi Arabia doesn't care what Oil Joe wants. They are pissed that Team Biden is even considering lifting sanctions on Iran.
Natural Gas
April ’22 gas expired yesterday at $5.336. May ’22 gas is up by around 6.7c this morning, near $5.403, in its first session as the prompt contract
> U.S. lower-48 dry gas production is still above 93 Bcf/d
> U.S. LNG feedgas demand is down by 0.5 Bcf/d around 12.0 Bcf/d. The decline in flows can be attributed to drops at Sabine Pass LNG and Freeport LNG
> Weather forecasts have weakened since Saturday, with the April ’22 gas-weighted heating degree day forecast falling from 349 HDDs on Saturday, to 329 HDDs on Wednesday
> In response to cooler weather in the Northeast, Canadian imports have jumped this week. According to pipeline nominations, current imports of Canadian gas are at 9.5 Bcf/d, its highest mark since January
Russia will not immediately demand buyers to pay for its gas in Roubles
> Germany triggered an emergency plan to manage gas supplies in response to a standoff over a Russian demand to pay for fuel with roubles or halt supplies
> The demand for payment in roubles is in retaliation for the West imposing crippling sanctions on Russia for its invasion of Ukraine
> The Kremlin signaled on Wednesday it could widen the demand for rouble payments to other commodities, including oil, grain, fertilizers, coal, and metals, raising the threat of recession in the United States and Europe, where inflation is already skyrocketing
> AEGIS notes any disruptions to gas flows could send European prices higher, as the continent is already facing an energy shortage
MY TAKE: The most recent prices for LNG that I see are $33.01/MMBtu in Europe (Dutch TTF price) and $33.97/MMBtu in Asia (Japan/Korea Marker).