Oil & Gas Prices - Oct 14
Posted: Fri Oct 14, 2022 9:12 am
Opening Prices:
> WTI is down $1.80 to $87.31/bbl, and Brent is down $1.67 to $92.90/bbl.
> Natural gas is down -9.9c to $6.642/MMBtu.
AEGIS Notes
Oil
Oil heads for a weekly decline amid fears of a global recession and weaker demand
WTI is trading below $88/Bbl on Friday and is down more than 4% this week
The IEA cut its oil demand forecast for this year and next on Thursday, warning of the possibility of a global recession < Always keep in mind that IEA (based in France) has a long history of understating oil demand. The people that sign their paycheck want to convince us that wind, solar and EVs can lower demand for oil.
China's "Covid-zero" policy continues to weigh on the market amid anticipation of weaker fuel demand
China, the world's largest crude oil importer, reported more bearish economic data amid continued COVID-zero policies (BBG, Reuters)
Although the nation has fewer cases compared to other countries, it follows a zero-COVID policy, which is negatively impacting economic growth and, in turn, oil demand
Air travel during the first week of October's week-long holiday was down 42% from the same period last year, according to China Aviation Daily
Road travel was down by 30% for the same period, according to China’s Ministry of Transport
The lack of activity puts downward pressure on global oil prices as transportation makes up over half of China's oil consumption
President Biden criticized U.S. fuel prices yet again and said he would announce new actions next week to address what he called a key driver of inflation (BBG)
“The price of gas is still too high, and we need to keep working to bring it down,” said Biden at an event on Thursday
His remarks follow a warning of "consequences" against Saudi Arabia for lowering crude production
Additionally, National Security spokesman John Kirby said yesterday that “Other OPEC nations communicated to us privately that they also disagreed with the Saudi decision but felt coerced to support Saudi’s direction.”
Team Biden has no control over OPEC+. This "Tough Talk" is just political BS.
Natural Gas
Natural gas prices are down 2.5% in the prompt month after settling 4.5% higher yesterday
The Winter '22/’23 strip is down 2.27% to $6.71, and the Summer ’23 strip is down .64% to $5.18
Weather forecasts continue to show significantly colder weather in this upcoming week, which should lead to more gas demand for space heating in some parts of the country
Yesterday the EIA reported a storage build of 125 Bcf, as inventory builds continue to shrink the gap to the five-year average storage level
Current stocks are 126 Bcf lower than they were one year ago, and 221 Bcf below the five-year average
Texas LNG and Magnolia LNG projects are expected to obtain FID in 2023 (BBG)
The plants are expected to be in service in 2027 and 2028
Texas LNG will be located in Brownsville, Texas, and Magnolia LNG will be in Lake Charles, Louisiana
Texas LNG will have two trains, while Magnolia LNG will initially have two trains before adding an additional two
France asks the U.S. to lower LNG prices (Barrons)
On Wednesday, at a meeting of finance ministers, the economic minister of France asked the US to reduce prices of LNG, a week after similar comments from Germany
"We expect more from the US administration to get LNG at a cheaper price with a long-term approach," he said
Imports from the US have accounted for 45% of Europe’s LNG imports this year compared to 28% last year
Biden has no control over LNG prices.
> WTI is down $1.80 to $87.31/bbl, and Brent is down $1.67 to $92.90/bbl.
> Natural gas is down -9.9c to $6.642/MMBtu.
AEGIS Notes
Oil
Oil heads for a weekly decline amid fears of a global recession and weaker demand
WTI is trading below $88/Bbl on Friday and is down more than 4% this week
The IEA cut its oil demand forecast for this year and next on Thursday, warning of the possibility of a global recession < Always keep in mind that IEA (based in France) has a long history of understating oil demand. The people that sign their paycheck want to convince us that wind, solar and EVs can lower demand for oil.
China's "Covid-zero" policy continues to weigh on the market amid anticipation of weaker fuel demand
China, the world's largest crude oil importer, reported more bearish economic data amid continued COVID-zero policies (BBG, Reuters)
Although the nation has fewer cases compared to other countries, it follows a zero-COVID policy, which is negatively impacting economic growth and, in turn, oil demand
Air travel during the first week of October's week-long holiday was down 42% from the same period last year, according to China Aviation Daily
Road travel was down by 30% for the same period, according to China’s Ministry of Transport
The lack of activity puts downward pressure on global oil prices as transportation makes up over half of China's oil consumption
President Biden criticized U.S. fuel prices yet again and said he would announce new actions next week to address what he called a key driver of inflation (BBG)
“The price of gas is still too high, and we need to keep working to bring it down,” said Biden at an event on Thursday
His remarks follow a warning of "consequences" against Saudi Arabia for lowering crude production
Additionally, National Security spokesman John Kirby said yesterday that “Other OPEC nations communicated to us privately that they also disagreed with the Saudi decision but felt coerced to support Saudi’s direction.”
Team Biden has no control over OPEC+. This "Tough Talk" is just political BS.
Natural Gas
Natural gas prices are down 2.5% in the prompt month after settling 4.5% higher yesterday
The Winter '22/’23 strip is down 2.27% to $6.71, and the Summer ’23 strip is down .64% to $5.18
Weather forecasts continue to show significantly colder weather in this upcoming week, which should lead to more gas demand for space heating in some parts of the country
Yesterday the EIA reported a storage build of 125 Bcf, as inventory builds continue to shrink the gap to the five-year average storage level
Current stocks are 126 Bcf lower than they were one year ago, and 221 Bcf below the five-year average
Texas LNG and Magnolia LNG projects are expected to obtain FID in 2023 (BBG)
The plants are expected to be in service in 2027 and 2028
Texas LNG will be located in Brownsville, Texas, and Magnolia LNG will be in Lake Charles, Louisiana
Texas LNG will have two trains, while Magnolia LNG will initially have two trains before adding an additional two
France asks the U.S. to lower LNG prices (Barrons)
On Wednesday, at a meeting of finance ministers, the economic minister of France asked the US to reduce prices of LNG, a week after similar comments from Germany
"We expect more from the US administration to get LNG at a cheaper price with a long-term approach," he said
Imports from the US have accounted for 45% of Europe’s LNG imports this year compared to 28% last year
Biden has no control over LNG prices.