Oil & Gas Prices - Nov 11
Posted: Fri Nov 11, 2022 10:53 am
The Year of the Roller Coaster continues as the "noise" impacting oil traders isn't letting up. What happens when the SPR draws end???
Opening Prices:
> WTI is up $2.75 to $89.22/bbl, and Brent is up $2.68 to $96.35/bbl.
> Natural gas is up 5.8c to $6.297/MMBtu.
AEGIS Notes
Oil
Oil heads for another weekly loss despite an early price spike
WTI rose by more than 3% this morning to trade near $89
The USD Index (DXY – a proxy for U.S. Dollar strength against a basket of six international currencies) fell more than 3% this week to the lowest since August
A weaker dollar (DXY Index) can cause foreign buyers of dollar-denominated commodities to pay less for the same amount of goods
China announced that it’s planning on easing its Covid restrictions (BBG)
China announced that it would reduce the quarantine period that travelers and people who have been in close contact with infected people must spend
The nation also plans to scrap the system that penalizes airlines for bringing new virus cases into the nation
Lockdowns have hampered China's fuel demand this year, and the pace of reopening will be a key factor in deciding the demand rebound
Despite the strict Covid strategy, daily cases have climbed to the highest since April
Many analysts doubt that the nation will reopen rapidly, but if China's Covid-zero policies are broadly relaxed, it would be bullish for crude demand
In a time when the market is speculating sanctions on Russian supply, a full reopening of China may increase oil demand by about 0.5 MMBbl/d, said Saul Kavonic, an analyst at Credit Suisse Group
However, concerns that China would continue to impose COVID lockdowns along with bearish U.S. inventory data continues to put pressure on oil prices
Saudi Arabia’s energy minister Prince Abdulaziz said that OPEC+ would continue to be cautious about oil production and that "it's about being responsible... not losing sight" of what the market requires (BBG)
The 23-nation coalition, led by Riyadh and Russia, is set to meet on December 4 to determine whether to reduce output once again, keep it stable, or turn around and pump more
Speaking about China, Prince Abdulaziz stated, "The jury is still out, and the Chinese authorities are saying they are going to continue to be strict and diligent and follow the same regimentation that they have"
Natural Gas
Natural gas prices are up 2.5% this morning but down 8% on the week
Yesterday the EIA reported a storage build of 79 Bcf, which fell within the survey range of 66-101 Bcf
This most recent injection has left storage only 73 Bcf below the five-year average inventory level, which is a relatively normal level and should keep fears of a supply shortage muted, barring extreme cold
Williams company asks FERC to approve Regional Energy Access expansion (Reuters)
The US energy company is urging federal regulators to approve the expansion of the Transcontinental gas pipeline to ensure adequate supplies to Pennsylvania, New Jersey, and Maryland
Williams said that if FERC does not approve the project by November 30, the company may not be able to meet construction windows established to protect endangered species
Midstream companies have had difficulty building pipeline projects in the US Northeast, mostly due to state opposition and permits being held up in courts. Keep electing Climate Change Wachos and your utility bills will keep going higher and risk of power outages will increase.
German meteorological office says winter could be mild (Reuters) < Wishful thinking or just an attempt to reduce fear?
The latest outlook from the German meteorological office says that a mild winter is more likely, with their model forecasting this winter to be in the 33% of mildest winters since 1991
There have been concerns over a potential cold winter in Europe due to the lack of Russian gas flows into the region, however, storage has filled to capacity, and weather so far has been warmer than average, assuaging fears
Opening Prices:
> WTI is up $2.75 to $89.22/bbl, and Brent is up $2.68 to $96.35/bbl.
> Natural gas is up 5.8c to $6.297/MMBtu.
AEGIS Notes
Oil
Oil heads for another weekly loss despite an early price spike
WTI rose by more than 3% this morning to trade near $89
The USD Index (DXY – a proxy for U.S. Dollar strength against a basket of six international currencies) fell more than 3% this week to the lowest since August
A weaker dollar (DXY Index) can cause foreign buyers of dollar-denominated commodities to pay less for the same amount of goods
China announced that it’s planning on easing its Covid restrictions (BBG)
China announced that it would reduce the quarantine period that travelers and people who have been in close contact with infected people must spend
The nation also plans to scrap the system that penalizes airlines for bringing new virus cases into the nation
Lockdowns have hampered China's fuel demand this year, and the pace of reopening will be a key factor in deciding the demand rebound
Despite the strict Covid strategy, daily cases have climbed to the highest since April
Many analysts doubt that the nation will reopen rapidly, but if China's Covid-zero policies are broadly relaxed, it would be bullish for crude demand
In a time when the market is speculating sanctions on Russian supply, a full reopening of China may increase oil demand by about 0.5 MMBbl/d, said Saul Kavonic, an analyst at Credit Suisse Group
However, concerns that China would continue to impose COVID lockdowns along with bearish U.S. inventory data continues to put pressure on oil prices
Saudi Arabia’s energy minister Prince Abdulaziz said that OPEC+ would continue to be cautious about oil production and that "it's about being responsible... not losing sight" of what the market requires (BBG)
The 23-nation coalition, led by Riyadh and Russia, is set to meet on December 4 to determine whether to reduce output once again, keep it stable, or turn around and pump more
Speaking about China, Prince Abdulaziz stated, "The jury is still out, and the Chinese authorities are saying they are going to continue to be strict and diligent and follow the same regimentation that they have"
Natural Gas
Natural gas prices are up 2.5% this morning but down 8% on the week
Yesterday the EIA reported a storage build of 79 Bcf, which fell within the survey range of 66-101 Bcf
This most recent injection has left storage only 73 Bcf below the five-year average inventory level, which is a relatively normal level and should keep fears of a supply shortage muted, barring extreme cold
Williams company asks FERC to approve Regional Energy Access expansion (Reuters)
The US energy company is urging federal regulators to approve the expansion of the Transcontinental gas pipeline to ensure adequate supplies to Pennsylvania, New Jersey, and Maryland
Williams said that if FERC does not approve the project by November 30, the company may not be able to meet construction windows established to protect endangered species
Midstream companies have had difficulty building pipeline projects in the US Northeast, mostly due to state opposition and permits being held up in courts. Keep electing Climate Change Wachos and your utility bills will keep going higher and risk of power outages will increase.
German meteorological office says winter could be mild (Reuters) < Wishful thinking or just an attempt to reduce fear?
The latest outlook from the German meteorological office says that a mild winter is more likely, with their model forecasting this winter to be in the 33% of mildest winters since 1991
There have been concerns over a potential cold winter in Europe due to the lack of Russian gas flows into the region, however, storage has filled to capacity, and weather so far has been warmer than average, assuaging fears