Oil & Gas Prices - Dec 9
Posted: Fri Dec 09, 2022 9:55 am
Opening Prices:
> WTI is up $1.28 to $72.74/bbl, and Brent is up $1.07 to $77.22/bbl.
> Natural gas is up 23.2c to $6.194/MMBtu. < Hang on to your gassers, Santa Claus is coming to town.
AEGIS Notes
Oil
Oil is set to post a nearly 10% weekly loss
> WTI gained nearly $1.30 this morning to trade near the YTD lows of $73/Bbl (after starting the week at nearly $77/Bbl)
> Demand concerns continue to outweigh bullish factors, with worries about a global recession being exacerbated by a potential tightening of monetary policy
> Despite China's announcement that it will soften its strict zero-Covid policy, a rise in Covid cases may remain a barrier to economic growth in 2023
> The market is still assessing the impact of the price cap on Russian crude
> Russian seaborne exports decreased by almost 500,000 Bbl/d on Tuesday, a 16% decline from November's average of 3.08 MMBbl/d, according to commodity analytics firm Kpler (WSJ)
Keystone pipeline remains shut down, and the reason for the 14,000 Bbl/d crude oil spill near Steele City, Kansas, is still unknown as of Thursday night (Reuters)
> US Pipeline and Hazardous Materials Safety Administration (PHMSA) released a statement late Thursday that the 622,000 Bbl/d pipeline must be shut down until the regulator approves a restart
> TC Energy has declared force majeure on the outage and has not yet specified how long the force majeure will last
> The shutdown of Keystone will limit deliveries of Canadian crude to the Gulf, where it is processed by refineries or exported, as well as to the U.S. storage hub in Cushing, Oklahoma
Natural Gas
Prompt month natural gas prices are up 4% this morning to $6.20
> The Summer ’23 strip is up 5c to $4.95, and the Winter ‘23/’24 strip is higher by 3c to $5.46
> Weather forecasts shifted cooler again today, with the Lower-48 forecast falling 6 °F in the 1-15 day period
> Lower-48 average temperatures are currently above normal but expected to fall below normal after this weekend and remain cooler over the next two weeks
> Yesterday the EIA reported a storage withdrawal of 21 Bcf, which was smaller than analysts expected and smaller than the five-year average withdrawal for this time of year
Energy permitting reform removed from defense spending bill (S&P)
> It was believed that Senator Joe Manchin's permitting reform bill would be included in a defense spending bill that will be voted on by congress this month, however, it has been removed
> Manchin's bill would have eased the process of acquiring permits for the construction of energy infrastructure and specifically mentioned the long-delayed Mountain Valley Pipeline
> While the bill is unlikely to be passed this year, there is bipartisan support for permitting reform, and an alternative bill will likely be introduced in 2023
US utility-scale battery storage capacity to triple by 2025 (EIA)
> Battery storage is used to supplement renewables and intermittent energy sources such as wind and solar by storing power generated by them
> As of October 2022, there is 7.8 GW of battery storage capacity in the US, this is expected to grow to 30 GW by 2025
> Renewables directly compete with natural gas for a share of the power mix; as new wind, solar, and battery capacity is added, less gas is demanded by the power sector
> WTI is up $1.28 to $72.74/bbl, and Brent is up $1.07 to $77.22/bbl.
> Natural gas is up 23.2c to $6.194/MMBtu. < Hang on to your gassers, Santa Claus is coming to town.
AEGIS Notes
Oil
Oil is set to post a nearly 10% weekly loss
> WTI gained nearly $1.30 this morning to trade near the YTD lows of $73/Bbl (after starting the week at nearly $77/Bbl)
> Demand concerns continue to outweigh bullish factors, with worries about a global recession being exacerbated by a potential tightening of monetary policy
> Despite China's announcement that it will soften its strict zero-Covid policy, a rise in Covid cases may remain a barrier to economic growth in 2023
> The market is still assessing the impact of the price cap on Russian crude
> Russian seaborne exports decreased by almost 500,000 Bbl/d on Tuesday, a 16% decline from November's average of 3.08 MMBbl/d, according to commodity analytics firm Kpler (WSJ)
Keystone pipeline remains shut down, and the reason for the 14,000 Bbl/d crude oil spill near Steele City, Kansas, is still unknown as of Thursday night (Reuters)
> US Pipeline and Hazardous Materials Safety Administration (PHMSA) released a statement late Thursday that the 622,000 Bbl/d pipeline must be shut down until the regulator approves a restart
> TC Energy has declared force majeure on the outage and has not yet specified how long the force majeure will last
> The shutdown of Keystone will limit deliveries of Canadian crude to the Gulf, where it is processed by refineries or exported, as well as to the U.S. storage hub in Cushing, Oklahoma
Natural Gas
Prompt month natural gas prices are up 4% this morning to $6.20
> The Summer ’23 strip is up 5c to $4.95, and the Winter ‘23/’24 strip is higher by 3c to $5.46
> Weather forecasts shifted cooler again today, with the Lower-48 forecast falling 6 °F in the 1-15 day period
> Lower-48 average temperatures are currently above normal but expected to fall below normal after this weekend and remain cooler over the next two weeks
> Yesterday the EIA reported a storage withdrawal of 21 Bcf, which was smaller than analysts expected and smaller than the five-year average withdrawal for this time of year
Energy permitting reform removed from defense spending bill (S&P)
> It was believed that Senator Joe Manchin's permitting reform bill would be included in a defense spending bill that will be voted on by congress this month, however, it has been removed
> Manchin's bill would have eased the process of acquiring permits for the construction of energy infrastructure and specifically mentioned the long-delayed Mountain Valley Pipeline
> While the bill is unlikely to be passed this year, there is bipartisan support for permitting reform, and an alternative bill will likely be introduced in 2023
US utility-scale battery storage capacity to triple by 2025 (EIA)
> Battery storage is used to supplement renewables and intermittent energy sources such as wind and solar by storing power generated by them
> As of October 2022, there is 7.8 GW of battery storage capacity in the US, this is expected to grow to 30 GW by 2025
> Renewables directly compete with natural gas for a share of the power mix; as new wind, solar, and battery capacity is added, less gas is demanded by the power sector