Always keep in mind that commodity prices often do weird things during holiday weeks.
Opening Prices:
> WTI is up $1.53 to $81.57/bbl, and Brent is up $1.66 to $89.11/bbl.
> Natural gas is down -11.9c to $6.657/MMBtu.
AEGIS Notes:
Oil
The crude markets experienced violent price action Monday as the Wall Street Journal reported that OPEC+ was discussing a 500 MBbl/d increase
> The WSJ cited “delegates” in its piece that quickly pushed WTI from $79/Bbl to $75/Bbl Monday morning
> Before noon central time, Saudi Arabia denied the report and said it stands ready to make further cuts if needed. “The current cut of 2 MMMBbl/d by OPEC+ continues until the end of 2023,” Saudi Energy Minister Prince Abdulaziz bin Salman said in a statement via the Saudi Press Agency (BBG)
> WTI quickly recovered, in a whipsawed action, with prices returning close to $80/Bbl before Nymex close at 1:30 CT
Some oil freight rates breached $100,000 a day yesterday, the highest since early 2020 when the Covid pandemic caused a surge in floating storage (Bloomberg)
Higher shipping costs are adding to the cost of crude oil as sanctions on Russia are forcing ships to take longer routes
The second-month US Gulf to China vessel rate is now near $7/Bbl, a steep increase from the 2021 average rate of $2.30/Bbl for the same route (Baltic Exchange)
AEGIS notes sanctions on Russia, and the pending sanctions and price cap coming on Dec. 5, will at best, continue to add friction to global trade flows of petroleum
Natural Gas
Natural gas prices are 2.5% lower from yesterday’s settlement
The Summer ’23 strip is down 7 cents to $4.96, and the Winter ‘23/’24 strip is lower by 6 cents to $5.47
Weather forecasts have shifted warmer for the central regions of the US over the next 1-15 days
The Midwest forecast shifted warmer by 23.5 °F, the Southeast by 34.8 °F, and the South Central by 23.6 °F
New England to receive first LNG cargo since summer (Reuters)
An LNG transport vessel from Trinidad and Tobago is currently waiting outside the Everett LNG import terminal in Boston
New England depends on imported gas during the winter months due to a lack of adequate pipeline capacity < Thanks to the idiots they keep electing, New England has some of the highest winter heating bills in America. A pipeline from Pennsylvania could cut their space heating bills in half.
The US Northeast has only imported 16.7 Bcf so far in 2022, compared to 18.1 Bcf last year, and a five-year average of 33.3 Bcf
Imports are down because of competition with European and Asian buyers who are paying much higher rates for LNG
New Fortress Energy finalizes deal for offshore gas project in Mexico (Reuters)
On Tuesday the company announced that it had reached a deal with Pemex to develop an LNG export plant and an integrated upstream project in Southeastern Mexico
Cost pressures over the past six years have prevented the development of the Lakach field which is estimated to hold 937 Bcf of gas reserves
Gas production is expected to begin in the first quarter of 2024, around the same time that the LNG export facility will become operational
Oil & Gas Prices - Nov 22
Oil & Gas Prices - Nov 22
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Nov 22
Oil rebounds from early plunge after Saudis deny OPEC+ output report. Reuters.
Oil prices rebounded from early losses on Monday after Saudi Arabia denied a report it was discussing an increase in oil supply with OPEC and its allies. Brent crude futures for January settled at $87.45, shedding 17 cents. U.S. West Texas Intermediate (WTI) crude futures for December settled at $79.73 a barrel, falling 35 cents ahead of the contract's expiry later on Monday. "It turned the whole situation upside down in a matter of minutes," said John Kilduff, partner at Again Capital LLC in New York. "The Saudis giveth and then they taketh away." The Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, recently cut production targets and the energy minister of de facto leader Saudi Arabia was quoted this month as saying the group will remain cautious.
MY TAKE: OPEC+ now has control of the oil price. They are not going to allow the oil price to fall because the cartel's governments rely on revenues from oil sales, especially Saudi Arabia.
Oil prices rebounded from early losses on Monday after Saudi Arabia denied a report it was discussing an increase in oil supply with OPEC and its allies. Brent crude futures for January settled at $87.45, shedding 17 cents. U.S. West Texas Intermediate (WTI) crude futures for December settled at $79.73 a barrel, falling 35 cents ahead of the contract's expiry later on Monday. "It turned the whole situation upside down in a matter of minutes," said John Kilduff, partner at Again Capital LLC in New York. "The Saudis giveth and then they taketh away." The Organization of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, recently cut production targets and the energy minister of de facto leader Saudi Arabia was quoted this month as saying the group will remain cautious.
MY TAKE: OPEC+ now has control of the oil price. They are not going to allow the oil price to fall because the cartel's governments rely on revenues from oil sales, especially Saudi Arabia.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - Nov 22
Closing Prices:
> Prompt-Month WTI (Jan 23) was up $0.91 on the day, to settle at $80.95.
> Prompt-Month Henry Hub (Dec 22) was up $0.003 on the day, to settle at $6.779. < JAN23 closed at $7.495. It will be the front month contract soon.
> Prompt-Month WTI (Jan 23) was up $0.91 on the day, to settle at $80.95.
> Prompt-Month Henry Hub (Dec 22) was up $0.003 on the day, to settle at $6.779. < JAN23 closed at $7.495. It will be the front month contract soon.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group