Oil & Gas Prices - Sept 22
Posted: Thu Sep 22, 2022 9:01 am
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Opening Prices:
> WTI is up $2.66 to $85.60/bbl, and Brent is up $2.58 to $92.41/bbl.
> Natural gas is down -6.8c to $7.711/MMBtu.
AEGIS Notes
Oil
Oil is trading nearly 3% higher this morning
> The market weighs the demand outlook following the Federal Reserve's third-consecutive interest rate hike of 75-basis-points
> Fed Chair Powell signaled even more aggressive hikes ahead
> The U.S dollar weakened relative to its recent highs
Fed hiked interest rates by 75-basis-points yesterday and signaled that rate hikes will continue into 2023 (BBG)
> Officials lifted their target for the federal funds rate benchmark (short-term bank rate) to a range of 3% to 3.25%
> Rates are expected to reach 4.4% by the end of this year and 4.6% in 2023, according to officials, which is a more hawkish shift than anticipated in their dot plot
> Fed Chair Powell agreed that the median of the quarterly projections made by policymakers implied an additional 125 basis points of tightening this year
> He added that the main takeaway was that he and his colleagues were committed to bringing inflation down to the Fed's target of 2% and "will keep at it until the job is done"
> Increased rates are constraining by nature and are expected to have an adverse effect on consumer spending
Signs of an economic slowdown are mounting, with U.S. gasoline and diesel demand falling to its lowest seasonal levels in more than a decade (BBG)
> Gasoline demand plunged to its lowest level for this time of year since 1997, according to the EIA's weekly statistics
> Distillate product supplied, a measure of diesel demand, is at its lowest since 2009
> The four-week average product supplied for both fuels—which measures the amount of product delivered to wholesale distributors—was below where it stood during the pandemic when lockdowns crippled economic activity
Natural Gas
Prompt-month gas prices are down 1.25% ahead of the EIA weekly storage report
> According to the Bloomberg survey, the median estimate is for a storage build of 95 Bcf, while the survey ranges from 80-104 Bcf
> The five-year average injection for this time of year is 88 Bcf
Cheniere will fix LNG plant equipment to pass the pollution test (Reuters)
> Tests showed that at least one of Cheniere's turbines failed to meet EPA pollution standards at its Louisiana export facility, while the turbines at their Texas facility are not affected
> The EPA raised their concerns with Cheniere years before they began operating, and Chenier is the only LNG exporter that uses these types of turbines
> Robert Gray, the senior environmental coordinator for Sabine Pass, said, "Our turbine engineers determined a repair could improve the emission performance of the turbine"
> The company requested approval to retest eight turbines and said it would replace four others
Britain formally lifts ban on gas fracking (Reuters)
> Shale gas fracking has been banned in the U.K. since 2019 due to environmental concerns and potential impact on seismic activity
> Earlier this month, new prime minister Liz Truss said fracking would be allowed where it was supported by communities
> However, experts have said that lifting the ban on fracking will not help energy prices this winter and will take several years to have an effect
Opening Prices:
> WTI is up $2.66 to $85.60/bbl, and Brent is up $2.58 to $92.41/bbl.
> Natural gas is down -6.8c to $7.711/MMBtu.
AEGIS Notes
Oil
Oil is trading nearly 3% higher this morning
> The market weighs the demand outlook following the Federal Reserve's third-consecutive interest rate hike of 75-basis-points
> Fed Chair Powell signaled even more aggressive hikes ahead
> The U.S dollar weakened relative to its recent highs
Fed hiked interest rates by 75-basis-points yesterday and signaled that rate hikes will continue into 2023 (BBG)
> Officials lifted their target for the federal funds rate benchmark (short-term bank rate) to a range of 3% to 3.25%
> Rates are expected to reach 4.4% by the end of this year and 4.6% in 2023, according to officials, which is a more hawkish shift than anticipated in their dot plot
> Fed Chair Powell agreed that the median of the quarterly projections made by policymakers implied an additional 125 basis points of tightening this year
> He added that the main takeaway was that he and his colleagues were committed to bringing inflation down to the Fed's target of 2% and "will keep at it until the job is done"
> Increased rates are constraining by nature and are expected to have an adverse effect on consumer spending
Signs of an economic slowdown are mounting, with U.S. gasoline and diesel demand falling to its lowest seasonal levels in more than a decade (BBG)
> Gasoline demand plunged to its lowest level for this time of year since 1997, according to the EIA's weekly statistics
> Distillate product supplied, a measure of diesel demand, is at its lowest since 2009
> The four-week average product supplied for both fuels—which measures the amount of product delivered to wholesale distributors—was below where it stood during the pandemic when lockdowns crippled economic activity
Natural Gas
Prompt-month gas prices are down 1.25% ahead of the EIA weekly storage report
> According to the Bloomberg survey, the median estimate is for a storage build of 95 Bcf, while the survey ranges from 80-104 Bcf
> The five-year average injection for this time of year is 88 Bcf
Cheniere will fix LNG plant equipment to pass the pollution test (Reuters)
> Tests showed that at least one of Cheniere's turbines failed to meet EPA pollution standards at its Louisiana export facility, while the turbines at their Texas facility are not affected
> The EPA raised their concerns with Cheniere years before they began operating, and Chenier is the only LNG exporter that uses these types of turbines
> Robert Gray, the senior environmental coordinator for Sabine Pass, said, "Our turbine engineers determined a repair could improve the emission performance of the turbine"
> The company requested approval to retest eight turbines and said it would replace four others
Britain formally lifts ban on gas fracking (Reuters)
> Shale gas fracking has been banned in the U.K. since 2019 due to environmental concerns and potential impact on seismic activity
> Earlier this month, new prime minister Liz Truss said fracking would be allowed where it was supported by communities
> However, experts have said that lifting the ban on fracking will not help energy prices this winter and will take several years to have an effect