Oil & Gas Prices - June 6
Posted: Mon Jun 06, 2022 8:50 am
Opening Prices:
> WTI is down $0.23 to $118.64/bbl, and Brent is down $0.21 to $119.51/bbl. < WTI moved to $119.66 by the time of this post.
> Natural gas is up 49.2c to $9.015/MMBtu. < HH gas moved to $9.14 by the time of this post.
Bloomberg:
"Oil climbed after Saudi Arabia signaled confidence in demand with a bigger-than-expected price increase of its crude for Asia.
West Texas Intermediate traded near $120 a barrel after earlier rising to the highest level in almost three months.
Saudi Arabia boosted its official selling prices for Asian customers in July as China -- the world’s top crude importer -- cautiously emerges from virus lockdowns that have strained its economy.
Oil has rallied almost 60% this year as rebounding demand from economies recovering from the pandemic coincided with a tightening market after Russia’s invasion of Ukraine. The war has fanned inflation, driving up the cost of food to fuels and prompted aggressive monetary tightening from central banks.
OPEC+ last week agreed to accelerate output increases following repeated calls by the US to pump more. The producer group said it would add 648,000 barrels a day for July and August, about 50% more than the increases seen in recent months. < However, the group has struggled recently to meet its supply targets, raising doubts about whether it would be able to meet the goal.
“Sentiment should remain decidedly bullish over the summer months,” said Stephen Brennock an analyst at brokerage PVM Oil Associates. “The rebound in oil demand coupled with the backdrop of inadequate supply has the makings for higher oil prices.”
The fuel market has also tightened considerably, just as the peak period for US demand kicks off with the summer driving season. Retail gasoline prices have rallied to a record, while futures in New York hit a fresh high on Monday.
AEGIS Notes
Oil
WTI trades near $120/bbl, its highest level in nearly three months
> Saudi Arabia raised the July price of its key Arab Light crude grade for Asian consumers by $2.10/Bbl, bringing it to $6.50/Bbl over the benchmark, the highest since May
> The move comes as China, the world's largest crude importer, cautiously emerges from COVID lockdowns, signaling a rebound in Chinese oil demand
> The kingdom also raised prices for all grades for the Mediterranean and NW Europe regions. U.S. customers' prices remained unchanged for the second month in a row
India is in talks with Rosneft about increasing its purchases of heavily discounted Russian oil (BBG)
> State-owned refineries are working together to finalize and secure new six-month supply contracts
> Russian oil exports to India increased to 740 MBbl/d in May, up from 284 MBbl/d in April and 34 MBbl/d a year ago, according to Kpler
Natural Gas
Natural gas futures are up by 49.2c, 5.5% this morning as weather forecasts tilt bullish
> The most change happened in the 6-10 day range, where the average pop-weighted average temp increased by 17.8 °F, and the South Central region by 5.7°F
> The warmer temperatures have increased gas demand forecasts for the regions
Power demand in Texas could hit record highs on June 7, according to the state’s grid operator, ERCOT
> Power usage is expected to top 75.19 GW, its highest ever, due to abnormally high heat.
> The early record is concerning for the state that has had concerns regarding its energy grid since the February 2021 Winter-storm Uri blackouts
> Lower-48 dry gas production is down by around 650 MMcf/d since last Friday
Energy Transfer LNG enters into LNG supply deal with China Gas Holdings
> The deal would require that Energy Transfer supply 0.7 Bcf/d of LNG to China Gas Holding for a period of twenty-five years
> The purchase price is indexed to the Henry Hub benchmark plus a fixed liquefaction charge, and first deliveries are expected to start in 2026
> The deal was the first for the Lake Charles LNG facility but paves the way to a final investment decision (FID) later this year
> WTI is down $0.23 to $118.64/bbl, and Brent is down $0.21 to $119.51/bbl. < WTI moved to $119.66 by the time of this post.
> Natural gas is up 49.2c to $9.015/MMBtu. < HH gas moved to $9.14 by the time of this post.
Bloomberg:
"Oil climbed after Saudi Arabia signaled confidence in demand with a bigger-than-expected price increase of its crude for Asia.
West Texas Intermediate traded near $120 a barrel after earlier rising to the highest level in almost three months.
Saudi Arabia boosted its official selling prices for Asian customers in July as China -- the world’s top crude importer -- cautiously emerges from virus lockdowns that have strained its economy.
Oil has rallied almost 60% this year as rebounding demand from economies recovering from the pandemic coincided with a tightening market after Russia’s invasion of Ukraine. The war has fanned inflation, driving up the cost of food to fuels and prompted aggressive monetary tightening from central banks.
OPEC+ last week agreed to accelerate output increases following repeated calls by the US to pump more. The producer group said it would add 648,000 barrels a day for July and August, about 50% more than the increases seen in recent months. < However, the group has struggled recently to meet its supply targets, raising doubts about whether it would be able to meet the goal.
“Sentiment should remain decidedly bullish over the summer months,” said Stephen Brennock an analyst at brokerage PVM Oil Associates. “The rebound in oil demand coupled with the backdrop of inadequate supply has the makings for higher oil prices.”
The fuel market has also tightened considerably, just as the peak period for US demand kicks off with the summer driving season. Retail gasoline prices have rallied to a record, while futures in New York hit a fresh high on Monday.
AEGIS Notes
Oil
WTI trades near $120/bbl, its highest level in nearly three months
> Saudi Arabia raised the July price of its key Arab Light crude grade for Asian consumers by $2.10/Bbl, bringing it to $6.50/Bbl over the benchmark, the highest since May
> The move comes as China, the world's largest crude importer, cautiously emerges from COVID lockdowns, signaling a rebound in Chinese oil demand
> The kingdom also raised prices for all grades for the Mediterranean and NW Europe regions. U.S. customers' prices remained unchanged for the second month in a row
India is in talks with Rosneft about increasing its purchases of heavily discounted Russian oil (BBG)
> State-owned refineries are working together to finalize and secure new six-month supply contracts
> Russian oil exports to India increased to 740 MBbl/d in May, up from 284 MBbl/d in April and 34 MBbl/d a year ago, according to Kpler
Natural Gas
Natural gas futures are up by 49.2c, 5.5% this morning as weather forecasts tilt bullish
> The most change happened in the 6-10 day range, where the average pop-weighted average temp increased by 17.8 °F, and the South Central region by 5.7°F
> The warmer temperatures have increased gas demand forecasts for the regions
Power demand in Texas could hit record highs on June 7, according to the state’s grid operator, ERCOT
> Power usage is expected to top 75.19 GW, its highest ever, due to abnormally high heat.
> The early record is concerning for the state that has had concerns regarding its energy grid since the February 2021 Winter-storm Uri blackouts
> Lower-48 dry gas production is down by around 650 MMcf/d since last Friday
Energy Transfer LNG enters into LNG supply deal with China Gas Holdings
> The deal would require that Energy Transfer supply 0.7 Bcf/d of LNG to China Gas Holding for a period of twenty-five years
> The purchase price is indexed to the Henry Hub benchmark plus a fixed liquefaction charge, and first deliveries are expected to start in 2026
> The deal was the first for the Lake Charles LNG facility but paves the way to a final investment decision (FID) later this year