Oil & Gas Prices - Sept 7
Posted: Wed Sep 07, 2022 9:15 am
Opening Prices:
> WTI is down $0.70 to $86.18/bbl, and Brent is down $0.81 to $92.02/bbl.
> Natural gas is down -8.7c to $8.058/MMBtu.
AEGIS Notes:
Oil
Oil prices extended losses this morning, with the prompt contract falling below $85/bbl for the first time since January
> Prices were impacted by China's renewed Covid lockdowns, persistent worries over an economic slowdown, and a stronger dollar
> The USD Index (DXY – a proxy for USD strength against a basket of other int’l currencies) is up by over 30 pips over the last two days, printing around 1.0% higher at 110.70. The DXY index is now trading near its highest level since 2002
> The Cal '22, '23, and '24 WTI swap prices are currently trading $1.39, $1.18, and $0.98 lower near $84.64, $79.53, and $72.89
Russian President Vladimir Putin threatened to stop energy supplies if price caps were imposed on Russia's oil and gas exports (Reuters)
> Today, Putin addressed an economic forum in Vladivostok and said that Russia would cancel its supply contracts if a price cap is imposed
> He added, "We will not supply gas, oil, coal, heating oil - we will not supply anything"
> Europe usually imports about 40% of its gas and 30% of its oil from Russia
> The comments came after the G-7 nations agreed to impose a cap on Russian oil Exports last week to restrict Russia's revenues
MY TAKE: The Elites running Europe need to realize they have lost the "Sanctions War". They need to "Get Real, Real Quick" or energy poverty will spread across the EU like a tidal wave.
China's crude oil imports rose to a three-month high in August, With a significant month-to-month increase (BBG)
> The nation imported 9.54 MMBbl/d of crude in August, 8% more than in July, according to data from the General Administration of Customs
> Analysts partly attributed the rise in August inflows to refiners refilling inventories after the summer and in preparation for the winter
> However, domestic demand in the upcoming months is still uncertain because Covid lockdown measures are threatening China's oil demand
MY TAKE: There is a global shortage of space heating fuels. It will draw a lot more attention in a few weeks.
Natural Gas
Prompt month natural gas prices are down another 1.5% today after yesterday’s 8% decline
> Summer’23 tenors are down 4%
> Weather forecasts have warmed slightly, indicating temperatures a few degrees above the 10-year normal
> Production is down 2 Bcf/d to 97 Bcf/d after coming off new yearly highs
EPA denies Cheniere’s request to be exempted from the new pollution rule (Reuters)
> The EPA said on Tuesday it has denied a request from leading LNG exporter Cheniere Energy to exempt turbines at its two Gulf Coast terminals from a hazardous pollution rule
> Around 250 U.S. gas turbines are subject to the new rule, according to an EPA list, with a quarter of them belonging to Cheniere
> The rejection raises questions about whether Cheniere will have to reduce LNG exports
> Cheniere said the decision may result in “unwarranted expenditures” but added that coming into compliance will not affect the company’s ability to supply LNG to customers
MY TAKE: As I pointed out in last Saturday's podcast, we are in the "Shoulder Season" for ngas. This means that storage builds will be larger for a few weeks. There is no shortage of ngas or propane in the U.S. today. However, the U.S. ngas market is still going to be extremely tight this coming winter. Keep in mind that a year ago, HH ngas was under $5.00.
> WTI is down $0.70 to $86.18/bbl, and Brent is down $0.81 to $92.02/bbl.
> Natural gas is down -8.7c to $8.058/MMBtu.
AEGIS Notes:
Oil
Oil prices extended losses this morning, with the prompt contract falling below $85/bbl for the first time since January
> Prices were impacted by China's renewed Covid lockdowns, persistent worries over an economic slowdown, and a stronger dollar
> The USD Index (DXY – a proxy for USD strength against a basket of other int’l currencies) is up by over 30 pips over the last two days, printing around 1.0% higher at 110.70. The DXY index is now trading near its highest level since 2002
> The Cal '22, '23, and '24 WTI swap prices are currently trading $1.39, $1.18, and $0.98 lower near $84.64, $79.53, and $72.89
Russian President Vladimir Putin threatened to stop energy supplies if price caps were imposed on Russia's oil and gas exports (Reuters)
> Today, Putin addressed an economic forum in Vladivostok and said that Russia would cancel its supply contracts if a price cap is imposed
> He added, "We will not supply gas, oil, coal, heating oil - we will not supply anything"
> Europe usually imports about 40% of its gas and 30% of its oil from Russia
> The comments came after the G-7 nations agreed to impose a cap on Russian oil Exports last week to restrict Russia's revenues
MY TAKE: The Elites running Europe need to realize they have lost the "Sanctions War". They need to "Get Real, Real Quick" or energy poverty will spread across the EU like a tidal wave.
China's crude oil imports rose to a three-month high in August, With a significant month-to-month increase (BBG)
> The nation imported 9.54 MMBbl/d of crude in August, 8% more than in July, according to data from the General Administration of Customs
> Analysts partly attributed the rise in August inflows to refiners refilling inventories after the summer and in preparation for the winter
> However, domestic demand in the upcoming months is still uncertain because Covid lockdown measures are threatening China's oil demand
MY TAKE: There is a global shortage of space heating fuels. It will draw a lot more attention in a few weeks.
Natural Gas
Prompt month natural gas prices are down another 1.5% today after yesterday’s 8% decline
> Summer’23 tenors are down 4%
> Weather forecasts have warmed slightly, indicating temperatures a few degrees above the 10-year normal
> Production is down 2 Bcf/d to 97 Bcf/d after coming off new yearly highs
EPA denies Cheniere’s request to be exempted from the new pollution rule (Reuters)
> The EPA said on Tuesday it has denied a request from leading LNG exporter Cheniere Energy to exempt turbines at its two Gulf Coast terminals from a hazardous pollution rule
> Around 250 U.S. gas turbines are subject to the new rule, according to an EPA list, with a quarter of them belonging to Cheniere
> The rejection raises questions about whether Cheniere will have to reduce LNG exports
> Cheniere said the decision may result in “unwarranted expenditures” but added that coming into compliance will not affect the company’s ability to supply LNG to customers
MY TAKE: As I pointed out in last Saturday's podcast, we are in the "Shoulder Season" for ngas. This means that storage builds will be larger for a few weeks. There is no shortage of ngas or propane in the U.S. today. However, the U.S. ngas market is still going to be extremely tight this coming winter. Keep in mind that a year ago, HH ngas was under $5.00.