Oil & Gas Prices - Mar 31
Posted: Thu Mar 31, 2022 8:48 am
Opening Prices:
> WTI is down $5.92 to $101.90/bbl, and Brent is down $5.91 to $107.54/bbl.
> Natural gas is down -3.1c to $5.574/MMBtu.
AEGIS Notes
Oil
Oil prices slumped on signs the U.S. is considering another release from its reserves
> The U.S. is mulling the release of roughly 1 MMBbl/d for several months
> The total reserve release could be as much as 180 MMBbl
> A large SPR release “would reduce the amount of necessary priced-induced demand destruction, the sole oil rebalancing mechanism currently available in a world devoid of inventory buffers and supply elasticity,” Goldman Sachs analysts said in a note to clients (Bloomberg) < This means that by artificially keeping oil prices low, it will keep demand high and make getting the global oil market back in balance take longer. That makes sense, but the Administration knows that we first have to get through the summer (and before the mid-term elections) to keep inflation somewhat in check.
Russia is offering India deep discounts on the direct sale of oil as international pressure decreases the demand for its barrels (BBG)
> Moscow is offering its flagship Urals grade to India at discounts of as much as $35/Bbl
> AEGIS notes that the ability of Russia to find alternative outlets for its crude has helped offset the magnitude of the overall global supply shock
Natural Gas
U.S. gas futures are trading lower this morning, with the prompt contract trading 3.1c lower, near $5.574
> U.S. LNG feedgas demand is up by around 0.8 at 13.2 Bcf/d. The increase in flows can be attributed to hikes at Sabine Pass LNG and Freeport LNG
> The EIA is expected to report a build of 25 Bcf for the week ending March 25, according to Bloomberg
> Bloomberg survey estimates ranged from 18 Bcf to 37 Bcf < This would be a week early for a build. Space heating demand for the week ending April 1 should result in a net draw reported next week.
> If a 25-Bcf build is reported, total stocks will increase to 1,414 Bcf < The 5-year average inventory level at the beginning of the refill season is 1,662 Bcf.
New Fortress Energy Inc proposes to build the first offshore U.S. LNG export facility
> The terminal would sit in the Gulf of Mexico, 16 miles off the Louisiana coast, and allow tankers to dock and directly load
> "This project can play a significant role in supporting our nation's commitment to our European allies and their energy security as well as support our efforts to reduce emissions and energy poverty around the world," said New Fortress Chief Executive Wes Edens in a statement
According to current plans, the facility would have an export capacity of around 2.8 million tonnes per annum or around 0.4 Bcf/d
> WTI is down $5.92 to $101.90/bbl, and Brent is down $5.91 to $107.54/bbl.
> Natural gas is down -3.1c to $5.574/MMBtu.
AEGIS Notes
Oil
Oil prices slumped on signs the U.S. is considering another release from its reserves
> The U.S. is mulling the release of roughly 1 MMBbl/d for several months
> The total reserve release could be as much as 180 MMBbl
> A large SPR release “would reduce the amount of necessary priced-induced demand destruction, the sole oil rebalancing mechanism currently available in a world devoid of inventory buffers and supply elasticity,” Goldman Sachs analysts said in a note to clients (Bloomberg) < This means that by artificially keeping oil prices low, it will keep demand high and make getting the global oil market back in balance take longer. That makes sense, but the Administration knows that we first have to get through the summer (and before the mid-term elections) to keep inflation somewhat in check.
Russia is offering India deep discounts on the direct sale of oil as international pressure decreases the demand for its barrels (BBG)
> Moscow is offering its flagship Urals grade to India at discounts of as much as $35/Bbl
> AEGIS notes that the ability of Russia to find alternative outlets for its crude has helped offset the magnitude of the overall global supply shock
Natural Gas
U.S. gas futures are trading lower this morning, with the prompt contract trading 3.1c lower, near $5.574
> U.S. LNG feedgas demand is up by around 0.8 at 13.2 Bcf/d. The increase in flows can be attributed to hikes at Sabine Pass LNG and Freeport LNG
> The EIA is expected to report a build of 25 Bcf for the week ending March 25, according to Bloomberg
> Bloomberg survey estimates ranged from 18 Bcf to 37 Bcf < This would be a week early for a build. Space heating demand for the week ending April 1 should result in a net draw reported next week.
> If a 25-Bcf build is reported, total stocks will increase to 1,414 Bcf < The 5-year average inventory level at the beginning of the refill season is 1,662 Bcf.
New Fortress Energy Inc proposes to build the first offshore U.S. LNG export facility
> The terminal would sit in the Gulf of Mexico, 16 miles off the Louisiana coast, and allow tankers to dock and directly load
> "This project can play a significant role in supporting our nation's commitment to our European allies and their energy security as well as support our efforts to reduce emissions and energy poverty around the world," said New Fortress Chief Executive Wes Edens in a statement
According to current plans, the facility would have an export capacity of around 2.8 million tonnes per annum or around 0.4 Bcf/d