Oil & Gas Prices - Nov 30

[dan_s]

Opening Prices:
> WTI is up $2.32 to $80.52/bbl, and Brent is up $2.29 to $85.32/bbl.
> Natural gas is up 0.8c to $7.243/MMBtu.

At the end of our tomorrow's webinar we will take questions on the overall oil and gas markets.
The webinar starts at 11AM CT. Register on the EPG home page.

AEGIS Notes
Oil

Oil extends gains from yesterday’s rally
> WTI gains nearly $2.30/Bbl to trade above $80/Bbl for the first time this week
> OPEC and other major oil producers are likely to maintain current output levels at their meeting on Sunday, said the bloc’s delegates (WSJ)
> The move marks a change in OPEC's internal discussions after some members clamored for a production hike of up to 500,000 bpd earlier this month, according to delegates
> Reports of OPEC+ cutting production have outweighed the concerns about rising Chinese oil growth in recent days
> On Tuesday, China recorded 37,828 new cases of Covid, down from the 38,645 cases reported the day before. There were also no new deaths reported (Reuters) < If almost all of the cases are "mild" (i.e. no new deaths), why is China making such a big deal out of this? Could it be to use FEAR to control the population??? Could it be to keep a lid on oil prices, since they import a lot of oil???
> The city of Guangzhou also eased some Covid restrictions in several districts, according to government statements

The market awaits the EU’s decision on the Russian price cap and production decision from OPEC+ (Dec 4)
> As of now, the price cap is scheduled to go into effect on December 5, along with additional sanctions on Russian crude
MY TAKE: The price cap is a worthless political ploy to make it appear that the EU actually has some power. Without a steady flow of oil from Russia, most of the EU countries are totally screwed.

China and India are purchasing Russian crude at a 40% discount (BBG)
> Bloomberg reports that China and India are already purchasing Russia's premium Urals crude oil for a huge $33.28/Bbl discount compared to Brent
> EU oil-price-cap talks are still ongoing, and a price hasn’t yet been agreed upon
> According to reports, Russia is drafting a presidential decree that would forbid its companies and traders from selling oil to anyone who partakes in a price cap

Natural Gas

Prompt month natural gas prices are down slightly this morning, trading around $7.15
> Lower 48 weather forecasts for the next two weeks have cooled by a total of 6 °F, with most of the cooling occurring in the Northeast region, which fell 17° in total from yesterday’s forecast < Look at the 10-day forecast for Chicago. Sub-freezing with lots of wind = big draws from storage.

Alaskan utilities exploring the idea of importing LNG (Alaska Public Media)
> While the two main Alaskan utilities can supply customers with gas for the next several years, the supply of gas is questionable looking out over the next ten years < This should not be happening in Alaska, which has massive natural gas reserves.
> The utilities have been hiring consultants to investigate the possibility of bolstering existing stocks of natural gas with imported LNG
> Alaska currently produces about 31 Bcf of natural gas per year, however, companies operating in the region have said that most of the easily accessible gas will be accessed over the next decade

Manchin’s Mountain Valley Pipeline deal in trouble (Cardinal News)
> In July, Senator Joe Manchin voted for the Inflation Reduction Act in exchange for his party’s support in passing a permit regulation bill, which would speed up the permitting process for energy infrastructure such as MVP
> While there are two opportunities in December for Manchin to pass his legislation as a part of other “must pass” funding bills, opposition among both Democrats and Republicans remain
> Many Democrats do not support Manchin’s plan due to their opposition to fossil fuels, and some Republicans do not support it either but may introduce their own permitting bill
> Rep. Mike Rogers said that there was “zero chance” that Manchin’s bill would be included in the defense spending bill this December
MY TAKE: Manchin needs to switch parties.

[SergioSays]

Manchin would rather be the Dems' useful idiot. Depressing.

[mkarpoff]

My understanding is that Manchin has been afraid that if he switched parties he would be challenged in a Repub primary, and lose. He is probably right. Why would Repub voters back him in a primary when there are lifelong Repubs for whom to vote. Any one of them would beat any Dem candidate in W VA

[dan_s]

Closing Prices:
> Prompt-Month WTI (Jan 23) was up $2.35 on the day, to settle at $80.55
> Prompt-Month Henry Hub (Jan 23) was down $-0.305 on the day, to settle at $6.930

[Fraser921]

I don't know why crude isn't over $100 with fundamentals. Maybe you can add color on when this will turn around from 75-80 range from todays webinar. I will be there!