Oil & Gas Prices - Nov 10
Posted: Thu Nov 10, 2022 10:43 am
Opening Prices:
> WTI is up $0.18 to $86.01/bbl, and Brent is up $0.41 to $93.06/bbl.
> Natural gas is up 20.4c to $6.069/MMBtu.
AEGIS Notes
OIl
Oil rebounds slightly after three days of losses
WTI gains nearly 0.5% on Thursday to trade near $86/Bbl
U.S.’s overall CPI, a measure of inflation, rose by 0.4% last month to 7.7% year on year
The inflation data was weaker than expected and could ease the pressure on the Fed’s rate hikes
Additionally, Equities and Treasuries extended gains by nearly 3% ahead of the data
The USD Index (DXY – a proxy for U.S. Dollar strength against a basket of six international currencies) weakened relative to its recent highs to a four-week low
A weaker dollar (DXY Index) can cause foreign buyers of dollar-denominated commodities to pay less for the same amount of goods
Despite the rally this morning, there is downward pressure on prices from the recent surge in Covid cases in China
Nearly five million people are under lockdown in China’s southern manufacturing hub Guangzhou after an uptick in cases
Concerns about economic growth and demand disruptions continue to grow as the country upholds its strict Covid-zero policy
The New York diesel market hints at a worsening East Coast fuel crisis (BBG)
The premium for the spot over futures prices for diesel fuel for heating and transportation reached a new high amid historically lowest seasonal inventories
This might be one of the factors behind the recent spike in retail diesel prices, which have risen to $5.33/Gal, the highest since July
MY TAKE: This should not be happening in America, but Biden's War on Fossil Fuels will be paid for my consumers. This country runs on diesel. High diesel prices will impact the price we pay for EVERYTHING. Diesel shortages will cause even more supply chain problems.
Natural Gas
Natural gas prices are higher by 2.5% today
The Summer ’23 strip is up 3 cents to $4.83, and the Winter ‘23/’24 strip is higher by 4 cents to $5.36
Weather forecasts have shifted slightly warmer, but temperatures for the Lower 48 are still expected to fall about 6 degrees below normal starting this weekend and remain below normal for the next week < Within a few weeks Miss La Nina will be in control of natural gas prices.
US power resources may be constrained this winter (Reuters)
The North American Electric Reliability Corp said in it 2022-2023 Winter Reliability Assessment that some parts of North America may have insufficient energy supplies during a winter weather event
Severe weather events such as the February 2021 winter storm have left some regions without electricity for extended periods, the organization warns events like this to remain a risk to power supplies
The reason given for this assessment stems from limited natural gas infrastructure, fuel supply risks, and inadequate weatherization
This should not be happening in America!, we must get a common sense energy plan.
EU to propose gas price correction mechanism (Reuters)
The EU has been exploring potential measures to limit volatility in the Dutch TTF natural gas benchmark, potentially through a price cap
Many EU nations are opposed to a price cap, saying that it would reduce incentives to limit consumption and could turn LNG suppliers away
On Friday, the EU will outline a ‘price corridor’ which they believe could reduce volatility without impacting supplies
LNG Tankers will go to the highest bidder and all price caps will to is cause more space heating fuel shortages.
> WTI is up $0.18 to $86.01/bbl, and Brent is up $0.41 to $93.06/bbl.
> Natural gas is up 20.4c to $6.069/MMBtu.
AEGIS Notes
OIl
Oil rebounds slightly after three days of losses
WTI gains nearly 0.5% on Thursday to trade near $86/Bbl
U.S.’s overall CPI, a measure of inflation, rose by 0.4% last month to 7.7% year on year
The inflation data was weaker than expected and could ease the pressure on the Fed’s rate hikes
Additionally, Equities and Treasuries extended gains by nearly 3% ahead of the data
The USD Index (DXY – a proxy for U.S. Dollar strength against a basket of six international currencies) weakened relative to its recent highs to a four-week low
A weaker dollar (DXY Index) can cause foreign buyers of dollar-denominated commodities to pay less for the same amount of goods
Despite the rally this morning, there is downward pressure on prices from the recent surge in Covid cases in China
Nearly five million people are under lockdown in China’s southern manufacturing hub Guangzhou after an uptick in cases
Concerns about economic growth and demand disruptions continue to grow as the country upholds its strict Covid-zero policy
The New York diesel market hints at a worsening East Coast fuel crisis (BBG)
The premium for the spot over futures prices for diesel fuel for heating and transportation reached a new high amid historically lowest seasonal inventories
This might be one of the factors behind the recent spike in retail diesel prices, which have risen to $5.33/Gal, the highest since July
MY TAKE: This should not be happening in America, but Biden's War on Fossil Fuels will be paid for my consumers. This country runs on diesel. High diesel prices will impact the price we pay for EVERYTHING. Diesel shortages will cause even more supply chain problems.
Natural Gas
Natural gas prices are higher by 2.5% today
The Summer ’23 strip is up 3 cents to $4.83, and the Winter ‘23/’24 strip is higher by 4 cents to $5.36
Weather forecasts have shifted slightly warmer, but temperatures for the Lower 48 are still expected to fall about 6 degrees below normal starting this weekend and remain below normal for the next week < Within a few weeks Miss La Nina will be in control of natural gas prices.
US power resources may be constrained this winter (Reuters)
The North American Electric Reliability Corp said in it 2022-2023 Winter Reliability Assessment that some parts of North America may have insufficient energy supplies during a winter weather event
Severe weather events such as the February 2021 winter storm have left some regions without electricity for extended periods, the organization warns events like this to remain a risk to power supplies
The reason given for this assessment stems from limited natural gas infrastructure, fuel supply risks, and inadequate weatherization
This should not be happening in America!, we must get a common sense energy plan.
EU to propose gas price correction mechanism (Reuters)
The EU has been exploring potential measures to limit volatility in the Dutch TTF natural gas benchmark, potentially through a price cap
Many EU nations are opposed to a price cap, saying that it would reduce incentives to limit consumption and could turn LNG suppliers away
On Friday, the EU will outline a ‘price corridor’ which they believe could reduce volatility without impacting supplies
LNG Tankers will go to the highest bidder and all price caps will to is cause more space heating fuel shortages.