Oil & Gas Prices - Nov 4
Posted: Fri Nov 04, 2022 8:59 am
EPG Webinar starts at 10AM CT today.
Hosted by ROK Resources, a very promising Canadian Junior oil & gas company with close to 3,500 Boepd of production.
Opening Prices:
> WTI is up $3.48 to $91.65/bbl, and Brent is up $3.28 to $97.95/bbl.
> Natural gas is up 25.2c to $6.227/MMBtu.
AEGIS Notes
Oil
Oil surges to highest in more than three weeks
WTI rose nearly 4% this morning to trade above $91/Bbl
Bloomberg reported on Friday that China is planning on potentially easing its Covid restrictions
According to reports, Beijing is working on a plan to scrap the system that penalizes airlines for bringing new virus cases into the nation
However, China's COVID-19 cases hit their highest since August on Thursday, and the nation’s National Health Commission reiterated its stance on strict Covid curbs
It is unknown how long China will maintain its Covid-zero policy; its strict COVID restrictions continue to have an adverse impact on oil demand
The U.S. and its allies have decided to set a price cap on Russian crude oil at a fixed amount rather than a floating one that moves with benchmark crude prices (BBG)
It is still unclear at what level the price cap will be set, but coalition officials with knowledge of the matter said it would be a fixed amount and not a discount relative to Brent
S. officials have expressed a desire to set the crude oil cap above $60/Bbl, which they think would increase the likelihood of convincing Russia to sell at least some of its exports through the program
Despite being static, the cap will be periodically reviewed and could be amended by the coalition, which is comprised of the G7 nations and Australia
The group is pushing the cap's implementation in conjunction with the next round of EU sanctions that will go into effect on December 5 — essentially, a restriction on insurance and other services for shipments above a particular price
MY TAKE: This will hurt Europe more than it hurts Russia
Saudi Arabia reduced its oil prices for sales to Asia in December, indicating some concern about the demand outlook (BBG, Reuters)
State-controlled Saudi Aramco reduced its flagship Arab Light grade by 40 cents to $5.45/Bbl above the regional benchmark for December shipments to Asia, its main market
Interest rate hikes and weaker-than-expected fuel consumption in China amid its strict COVID-19 have affected the regional demand, according to some traders
Natural Gas
Gas prices are up 3.5% in the prompt month
The Summer ’23 seasonal strip is higher by 8 cents to $4.90, while the Winter ‘23/’24 strip is up 5 cents to $5.42
Weather models have shifted cooler today, with the 1-15 day forecast for the Lower 48 falling by 7 degrees
The largest change is from the Rockies region, which fell by 30 degrees compared to yesterday’s forecast, with most of the change occurring in the 6-15 day period
Freeport LNG submits analysis to federal regulators
The PHMSA said on Thursday that Freeport LNG had submitted a root cause failure analysis, which is required before the facility can resume operations
Freeport must still submit a restart plan to U.S. regulators before it can restart
AEGIS notes that the restart of Freeport LNG will add an additional 2.1 Bcf/d of demand, which will potentially occur around the same time that gas begins to be withdrawn from storage
Sempra to approve Port Arthur LNG facility
Sempra Energy said that they are prepared to start the first phase of their Port Arthur, Texas, LNG export facility in Q1 2023
The facility is expected to have a capacity of 1.7 Bcf/d and will begin operations around 2027
Sempra is also constructing two LNG export plants in Mexico and expanding its Cameron LNG facility
Hosted by ROK Resources, a very promising Canadian Junior oil & gas company with close to 3,500 Boepd of production.
Opening Prices:
> WTI is up $3.48 to $91.65/bbl, and Brent is up $3.28 to $97.95/bbl.
> Natural gas is up 25.2c to $6.227/MMBtu.
AEGIS Notes
Oil
Oil surges to highest in more than three weeks
WTI rose nearly 4% this morning to trade above $91/Bbl
Bloomberg reported on Friday that China is planning on potentially easing its Covid restrictions
According to reports, Beijing is working on a plan to scrap the system that penalizes airlines for bringing new virus cases into the nation
However, China's COVID-19 cases hit their highest since August on Thursday, and the nation’s National Health Commission reiterated its stance on strict Covid curbs
It is unknown how long China will maintain its Covid-zero policy; its strict COVID restrictions continue to have an adverse impact on oil demand
The U.S. and its allies have decided to set a price cap on Russian crude oil at a fixed amount rather than a floating one that moves with benchmark crude prices (BBG)
It is still unclear at what level the price cap will be set, but coalition officials with knowledge of the matter said it would be a fixed amount and not a discount relative to Brent
S. officials have expressed a desire to set the crude oil cap above $60/Bbl, which they think would increase the likelihood of convincing Russia to sell at least some of its exports through the program
Despite being static, the cap will be periodically reviewed and could be amended by the coalition, which is comprised of the G7 nations and Australia
The group is pushing the cap's implementation in conjunction with the next round of EU sanctions that will go into effect on December 5 — essentially, a restriction on insurance and other services for shipments above a particular price
MY TAKE: This will hurt Europe more than it hurts Russia
Saudi Arabia reduced its oil prices for sales to Asia in December, indicating some concern about the demand outlook (BBG, Reuters)
State-controlled Saudi Aramco reduced its flagship Arab Light grade by 40 cents to $5.45/Bbl above the regional benchmark for December shipments to Asia, its main market
Interest rate hikes and weaker-than-expected fuel consumption in China amid its strict COVID-19 have affected the regional demand, according to some traders
Natural Gas
Gas prices are up 3.5% in the prompt month
The Summer ’23 seasonal strip is higher by 8 cents to $4.90, while the Winter ‘23/’24 strip is up 5 cents to $5.42
Weather models have shifted cooler today, with the 1-15 day forecast for the Lower 48 falling by 7 degrees
The largest change is from the Rockies region, which fell by 30 degrees compared to yesterday’s forecast, with most of the change occurring in the 6-15 day period
Freeport LNG submits analysis to federal regulators
The PHMSA said on Thursday that Freeport LNG had submitted a root cause failure analysis, which is required before the facility can resume operations
Freeport must still submit a restart plan to U.S. regulators before it can restart
AEGIS notes that the restart of Freeport LNG will add an additional 2.1 Bcf/d of demand, which will potentially occur around the same time that gas begins to be withdrawn from storage
Sempra to approve Port Arthur LNG facility
Sempra Energy said that they are prepared to start the first phase of their Port Arthur, Texas, LNG export facility in Q1 2023
The facility is expected to have a capacity of 1.7 Bcf/d and will begin operations around 2027
Sempra is also constructing two LNG export plants in Mexico and expanding its Cameron LNG facility