Oil & Gas Prices - May 13
Posted: Fri May 13, 2022 9:29 am
Opening Prices:
> WTI is up $2.76 to $108.89/bbl, and Brent is up $2.67 to $110.12/bbl.
> Natural gas is up 12.6c to $7.865/MMBtu.
AEGIS Notes
Oil
Oil traded higher Friday morning as it moved within range of $12 this week
> EU begins to consider delaying oil sanctions on Hungary’s reluctance
> The EU had offered Hungary and Slovakia until the end of 2024 and the Czech Republic until June 2024 to comply with the sanctions as they rely heavily on Russian crude
> Other countries, including Bulgaria, have also begun to request exemptions from the proposed ban
Major distillate pipeline to provide relief to the diesel-depleted U.S. East Coast
> Colonial Pipeline Co.'s main distillate line from the Gulf Coast to the East Coast – is operating at full capacity, with first deliveries expected in early June in New Jersey
> Over 2 MMBbls of diesel cargo are on their way from Europe, the Middle East, and Asia to New York, with deliveries scheduled from mid-May through June 6 (Vortexa)
> East coast distillate inventories, consisting primarily of diesel, fell to a new record low of 21.3 MMBbls last week, 46% lower than a year ago
> AEGIS notes there has been a decoupling between the price of oil and oil product prices like diesel
MY TAKE: It is EXTREMELY IMPORTANT that we solve the diesel shortage, which seems to be getting worse. This country runs on diesel, as does every country in the OECD.
Natural Gas
The prompt-month (Jun' 22) gas contract is up by 12.6c this morning, near $7.865
> Lower-48 dry gas production is flat this morning at 94 Bcf/d, which is around 0.8 Bcf/d higher week-over-week, according to Criterion Research
> AEGIS notes that production will likely be the largest driver for prices from here and poses a large downside risk
> Feedgas demand is down at around 11.5 Bcf/d. Cameron LNG has a train down for maintenance that should last until around May 20, and now Corpus Christi LNG volumes have been reduced
The EIA reported an injection of 76 Bcf for the week ending May 6
> Responses to the survey ranged from 61 Bcf to 82 Bcf
> It was lower than the five-year average injection of 82 Bcf and above the 70 Bcf addition reported during the corresponding week in 2021
> Current inventory levels fell to 1.567 Tcf, while the deficit to last year narrowed to 376 Bcf, and the deficit to the five-year average expanded to 312 Bcf
Venture Global gas supply deals advance second Louisiana facility
> The company reached two separate long-term offtake contracts with ExxonMobil (NYSE:XOM) and has now secured buyers for 80% of the plant's projected 20 MM metric tons/yr capacity
> There still has not been an FID reached for the project, but analysts estimate that the company would likely proceed. They have moved forward before after a similar share of gas was bound to long-term contracts at its Calcasieu Pass facility
> WTI is up $2.76 to $108.89/bbl, and Brent is up $2.67 to $110.12/bbl.
> Natural gas is up 12.6c to $7.865/MMBtu.
AEGIS Notes
Oil
Oil traded higher Friday morning as it moved within range of $12 this week
> EU begins to consider delaying oil sanctions on Hungary’s reluctance
> The EU had offered Hungary and Slovakia until the end of 2024 and the Czech Republic until June 2024 to comply with the sanctions as they rely heavily on Russian crude
> Other countries, including Bulgaria, have also begun to request exemptions from the proposed ban
Major distillate pipeline to provide relief to the diesel-depleted U.S. East Coast
> Colonial Pipeline Co.'s main distillate line from the Gulf Coast to the East Coast – is operating at full capacity, with first deliveries expected in early June in New Jersey
> Over 2 MMBbls of diesel cargo are on their way from Europe, the Middle East, and Asia to New York, with deliveries scheduled from mid-May through June 6 (Vortexa)
> East coast distillate inventories, consisting primarily of diesel, fell to a new record low of 21.3 MMBbls last week, 46% lower than a year ago
> AEGIS notes there has been a decoupling between the price of oil and oil product prices like diesel
MY TAKE: It is EXTREMELY IMPORTANT that we solve the diesel shortage, which seems to be getting worse. This country runs on diesel, as does every country in the OECD.
Natural Gas
The prompt-month (Jun' 22) gas contract is up by 12.6c this morning, near $7.865
> Lower-48 dry gas production is flat this morning at 94 Bcf/d, which is around 0.8 Bcf/d higher week-over-week, according to Criterion Research
> AEGIS notes that production will likely be the largest driver for prices from here and poses a large downside risk
> Feedgas demand is down at around 11.5 Bcf/d. Cameron LNG has a train down for maintenance that should last until around May 20, and now Corpus Christi LNG volumes have been reduced
The EIA reported an injection of 76 Bcf for the week ending May 6
> Responses to the survey ranged from 61 Bcf to 82 Bcf
> It was lower than the five-year average injection of 82 Bcf and above the 70 Bcf addition reported during the corresponding week in 2021
> Current inventory levels fell to 1.567 Tcf, while the deficit to last year narrowed to 376 Bcf, and the deficit to the five-year average expanded to 312 Bcf
Venture Global gas supply deals advance second Louisiana facility
> The company reached two separate long-term offtake contracts with ExxonMobil (NYSE:XOM) and has now secured buyers for 80% of the plant's projected 20 MM metric tons/yr capacity
> There still has not been an FID reached for the project, but analysts estimate that the company would likely proceed. They have moved forward before after a similar share of gas was bound to long-term contracts at its Calcasieu Pass facility