Oil Price went on a wild ride Monday - Nov 21
Posted: Mon Nov 21, 2022 7:57 pm
Trading Economics
WTI crude futures pared losses to trade above $79 per barrel, after falling more than 5% to the lowest level since January, after Saudi Arabia denied news of a potential oil output increase. Earlier, the Wall Street Journal reported that Saudi Arabia and other OPEC producers were discussing an increase in crude production. The report suggested that an increase of up to 500,000 barrels per day was under discussion for OPEC+’s December 4th meeting. Oil prices have been falling for the past four sessions, amid demand concerns from tighter Covid curbs in China and fears that major central banks will continue raising interest rates. China reported its first Covid-related deaths in almost six months over the weekend, while localized lockdowns were implemented in some areas on Monday as the world’s top crude importer continued to grapple with resurgent Covid outbreaks. < MY TAKE: One Covid death in six months is no justification for lockdowns that impact millions. Something else is why China is doing this (ie. using FEAR to control people).
US natural gas futures traded nearly 8% higher at $6.8/MMBtu on Monday, extending last week’s 7% advance as attention turned back again to weather patterns. Recent forecasts show very cold weather arriving during the first week of December that would ramp up demand for gas-intensive heating. On the other hand, more gas is expected to remain available for domestic use after the Freeport LNG export facility announced it will have around 2 Bcf/d of production capacity available only by January, as it continues to repair damages from the June explosion. Meanwhile, EIA data showed US utilities added 64 billion cubic feet of gas to storage during the week that ended November 11th, in line with expectations, and gas stockpiles are close to the five-year average of 3.651 tcf for this time of the year. < MY TAKE: We are going to see EIA report some big draws from storage over the next six weeks.
WTI crude futures pared losses to trade above $79 per barrel, after falling more than 5% to the lowest level since January, after Saudi Arabia denied news of a potential oil output increase. Earlier, the Wall Street Journal reported that Saudi Arabia and other OPEC producers were discussing an increase in crude production. The report suggested that an increase of up to 500,000 barrels per day was under discussion for OPEC+’s December 4th meeting. Oil prices have been falling for the past four sessions, amid demand concerns from tighter Covid curbs in China and fears that major central banks will continue raising interest rates. China reported its first Covid-related deaths in almost six months over the weekend, while localized lockdowns were implemented in some areas on Monday as the world’s top crude importer continued to grapple with resurgent Covid outbreaks. < MY TAKE: One Covid death in six months is no justification for lockdowns that impact millions. Something else is why China is doing this (ie. using FEAR to control people).
US natural gas futures traded nearly 8% higher at $6.8/MMBtu on Monday, extending last week’s 7% advance as attention turned back again to weather patterns. Recent forecasts show very cold weather arriving during the first week of December that would ramp up demand for gas-intensive heating. On the other hand, more gas is expected to remain available for domestic use after the Freeport LNG export facility announced it will have around 2 Bcf/d of production capacity available only by January, as it continues to repair damages from the June explosion. Meanwhile, EIA data showed US utilities added 64 billion cubic feet of gas to storage during the week that ended November 11th, in line with expectations, and gas stockpiles are close to the five-year average of 3.651 tcf for this time of the year. < MY TAKE: We are going to see EIA report some big draws from storage over the next six weeks.