Oil & Gas Prices - July 5
Posted: Tue Jul 05, 2022 9:03 am
Opening Prices:
> WTI is down $0.18 to $108.25/bbl, and Brent is up $0.23 to $111.86/bbl. < WTI is down more than 5% at the time of this post to $102.57.
My GUESS is that FEAR of recession triggered a large sell that triggered a computer driven selloff.
> Natural gas is down -32.4c to $5.406/MMBtu. < HH ngas is bouncing back, at $5.72 at the time of this post
AEGIS Notes
Oil
A small number of shipowners still transporting Russian crude are making significant profits on at least one route, while others avoid the trade (BBG)
> Shipping Russian ESPO oil from the eastern Russian port of Kozmino to China can bring in almost $1.6 million, said shipbrokers
> That is around three times what it was before the invasion of Ukraine, according to Bloomberg
> The majority of ESPO exports in recent months have gone to or are headed towards Chinese ports, with occasional shipments traveling to India
Saudi Arabia raised oil prices for its largest market, Asia, for August due to indications that underlying demand is still strong despite mounting recessionary concerns
> Saudi Aramco increased the price of its key Arab Light crude grade for Asian buyers by $2.80/Bbl from July to $9.30 over the regional benchmark, almost a record high
> The world's largest independent oil trader, Vitol Group, issued a warning on Sunday, saying that demand was beginning to be impacted by high prices
> Meanwhile, Citigroup Inc. projected that the price of crude will most likely fall to $85/Bbl by the end of 2022 and may possibly reach $65 in the event of a severe recession
U.S. imports of European gasoline increased week over week by 57% in the last seven days of June in anticipation of the Fourth of July holiday (BBG)
> The week's European gasoline arrivals increased to 345 MBbl/d from the previous week's revised 220 MBbl/d, which was the lowest level since late March
A total of 2.415 MMBbl were delivered at ports throughout the U.S. East Coast by twelve vessels
Natural Gas
U.S. natural gas futures are trading lower this morning, near $5.431
> The gas-weighted cooling degree day total has fallen, indicating natural gas demand could come in slightly weaker than expected, coming in around 5.3 CDDs lower than Friday‘s total of 366.3 CDDs
> U.S. lower-48 dry gas production also touched the year-to-date high several times recently, and production is up by around 0.7 Bcf/d month-over-month
> AEGIS notes that we have been saying that associated and dry gas production remains the largest threat to gas prices. Production has been inconsistent, so it could just be a temporary push higher, but we will continue to watch this
Greece launches more energy subsidies to curb soaring energy costs
> Greece will extend subsidies for power bills totaling $700 MM euros for households and businesses
> On top of soaring energy costs, Russia has cut off supplies to some EU countries, triggering a further rise in natural gas prices for Europe
> The country has spent about $7 billion euros so far in power subsidies and other measures to help households
> AEGIS notes that some have blamed the subsidies by the European government for exacerbating the spike in power, gas prices
MY TAKE: The Eastern European Countries are screwed and "Energy Poverty" during the winter will spread.
> WTI is down $0.18 to $108.25/bbl, and Brent is up $0.23 to $111.86/bbl. < WTI is down more than 5% at the time of this post to $102.57.
My GUESS is that FEAR of recession triggered a large sell that triggered a computer driven selloff.
> Natural gas is down -32.4c to $5.406/MMBtu. < HH ngas is bouncing back, at $5.72 at the time of this post
AEGIS Notes
Oil
A small number of shipowners still transporting Russian crude are making significant profits on at least one route, while others avoid the trade (BBG)
> Shipping Russian ESPO oil from the eastern Russian port of Kozmino to China can bring in almost $1.6 million, said shipbrokers
> That is around three times what it was before the invasion of Ukraine, according to Bloomberg
> The majority of ESPO exports in recent months have gone to or are headed towards Chinese ports, with occasional shipments traveling to India
Saudi Arabia raised oil prices for its largest market, Asia, for August due to indications that underlying demand is still strong despite mounting recessionary concerns
> Saudi Aramco increased the price of its key Arab Light crude grade for Asian buyers by $2.80/Bbl from July to $9.30 over the regional benchmark, almost a record high
> The world's largest independent oil trader, Vitol Group, issued a warning on Sunday, saying that demand was beginning to be impacted by high prices
> Meanwhile, Citigroup Inc. projected that the price of crude will most likely fall to $85/Bbl by the end of 2022 and may possibly reach $65 in the event of a severe recession
U.S. imports of European gasoline increased week over week by 57% in the last seven days of June in anticipation of the Fourth of July holiday (BBG)
> The week's European gasoline arrivals increased to 345 MBbl/d from the previous week's revised 220 MBbl/d, which was the lowest level since late March
A total of 2.415 MMBbl were delivered at ports throughout the U.S. East Coast by twelve vessels
Natural Gas
U.S. natural gas futures are trading lower this morning, near $5.431
> The gas-weighted cooling degree day total has fallen, indicating natural gas demand could come in slightly weaker than expected, coming in around 5.3 CDDs lower than Friday‘s total of 366.3 CDDs
> U.S. lower-48 dry gas production also touched the year-to-date high several times recently, and production is up by around 0.7 Bcf/d month-over-month
> AEGIS notes that we have been saying that associated and dry gas production remains the largest threat to gas prices. Production has been inconsistent, so it could just be a temporary push higher, but we will continue to watch this
Greece launches more energy subsidies to curb soaring energy costs
> Greece will extend subsidies for power bills totaling $700 MM euros for households and businesses
> On top of soaring energy costs, Russia has cut off supplies to some EU countries, triggering a further rise in natural gas prices for Europe
> The country has spent about $7 billion euros so far in power subsidies and other measures to help households
> AEGIS notes that some have blamed the subsidies by the European government for exacerbating the spike in power, gas prices
MY TAKE: The Eastern European Countries are screwed and "Energy Poverty" during the winter will spread.