Oil & Gas Prices - May 4
Posted: Wed May 04, 2022 8:46 am
Opening Prices:
> WTI is up $4.11 to $106.52/bbl, and Brent is up $4.02 to $108.99/bbl.
> Natural gas is up 46.8c to $8.422/MMBtu.
AEGIS Notes: EU proposes a Russian crude embargo | Gas at a 13-year high
Crude Oil
EU proposes a Russian crude embargo over the next six months and refined products by the end of 2022
> Hungary and Slovakia will have exceptions until the end of 2023 to comply with sanctions
> EU Commission President Ursula von der Leyen maintained expectations to secure alternate supply lines while avoiding global market repercussions
India wants Russia to discount its oil to under $70 per barrel (BBG)
> State-owned and private refiners have bought more than 40 million barrels of Russian crude since the invasion of Ukraine in late February
> Meanwhile, independent refiners in China have begun purchasing Russian oil at substantial discounts (FT)
Natural Gas
The prompt-month (Jun' 22) gas contract is up by 46.8c this morning, near $8.422, after touching a fresh 13-year high of $7.954
> Lower-48 dry gas production is still near 92 Bcf/d. Over the last couple of weeks, production has struggled in the South Central and Rockies regions < If LNG exports stay near capacity all year, U.S. dry gas production will need to rise quickly to 97 Bcf per day for there to be any chance of refilling storage to the 5-year average before the beginning of the next winter heating season. This is why the Mother of All Bidding Wars has begun in early May.
> LNG feedgas demand is at around 12.14 Bcf/d. Freeport LNG feedgas volumes are back up near pre-maintenance levels
> Calcasieu Pass feedgas volumes are holding near their record-high of 1 Bcf/d. Cameron LNG nominations are lower, likely due to maintenance
Gas-fired power generation has been very strong, holding at around 65% of the thermal load, which includes coal, oil, and natural gas. This suggests that power producers are not utilizing coal because either coal prices have risen so much that gas is still more economical, or there are not enough coal supplies
U.S. LNG exports fell slightly in April, according to preliminary Refinitiv vessel tracking data
> U.S. LNG exports were about 7.10 MM tonnes (11.52 Bcf/d) last month, according to Refinitiv, down from a record high 7.67 MM tonnes (12.45 Bcf/d) in March
> Europe was the top importer of U.S. LNG for the fifth consecutive month, absorbing about 64% of all U.S. imports
> The drop in U.S. exports can be attributed to maintenance. Freeport brought a train down on April 5, and maintenance lasted through most of the month
> More maintenance will be conducted over the next few months, which should reduce exports
> WTI is up $4.11 to $106.52/bbl, and Brent is up $4.02 to $108.99/bbl.
> Natural gas is up 46.8c to $8.422/MMBtu.
AEGIS Notes: EU proposes a Russian crude embargo | Gas at a 13-year high
Crude Oil
EU proposes a Russian crude embargo over the next six months and refined products by the end of 2022
> Hungary and Slovakia will have exceptions until the end of 2023 to comply with sanctions
> EU Commission President Ursula von der Leyen maintained expectations to secure alternate supply lines while avoiding global market repercussions
India wants Russia to discount its oil to under $70 per barrel (BBG)
> State-owned and private refiners have bought more than 40 million barrels of Russian crude since the invasion of Ukraine in late February
> Meanwhile, independent refiners in China have begun purchasing Russian oil at substantial discounts (FT)
Natural Gas
The prompt-month (Jun' 22) gas contract is up by 46.8c this morning, near $8.422, after touching a fresh 13-year high of $7.954
> Lower-48 dry gas production is still near 92 Bcf/d. Over the last couple of weeks, production has struggled in the South Central and Rockies regions < If LNG exports stay near capacity all year, U.S. dry gas production will need to rise quickly to 97 Bcf per day for there to be any chance of refilling storage to the 5-year average before the beginning of the next winter heating season. This is why the Mother of All Bidding Wars has begun in early May.
> LNG feedgas demand is at around 12.14 Bcf/d. Freeport LNG feedgas volumes are back up near pre-maintenance levels
> Calcasieu Pass feedgas volumes are holding near their record-high of 1 Bcf/d. Cameron LNG nominations are lower, likely due to maintenance
Gas-fired power generation has been very strong, holding at around 65% of the thermal load, which includes coal, oil, and natural gas. This suggests that power producers are not utilizing coal because either coal prices have risen so much that gas is still more economical, or there are not enough coal supplies
U.S. LNG exports fell slightly in April, according to preliminary Refinitiv vessel tracking data
> U.S. LNG exports were about 7.10 MM tonnes (11.52 Bcf/d) last month, according to Refinitiv, down from a record high 7.67 MM tonnes (12.45 Bcf/d) in March
> Europe was the top importer of U.S. LNG for the fifth consecutive month, absorbing about 64% of all U.S. imports
> The drop in U.S. exports can be attributed to maintenance. Freeport brought a train down on April 5, and maintenance lasted through most of the month
> More maintenance will be conducted over the next few months, which should reduce exports