Oil & Gas Prices - Dec 21
Posted: Wed Dec 21, 2022 10:20 am
Opening Prices;
> WTI is up $1.49 to $77.72/bbl, and Brent is up $1.56 to $81.55/bbl.
> Natural gas is up 17.6c to $5.502/MMBtu.
AEGIS Notes
Oil
Oil continues to rally for a third-consecutive day
> Feb ’23 WTI gains $1.49 this morning to trade near $78/Bbl
> The API estimates U.S. crude inventories to fall by about 3.1 MMBbl for the week ending December 16
> Concerns of a spike in Covid-19 cases in China as the nation continues to drop its Covid-zero policy may add downward pressure to crude prices
> TC Energy delayed the 0.622 Bbl/d Keystone Pipeline’s restart plans until December 28 or 29
Saudi Energy Minister says OPEC+’s decision to cut oil output was spot on (BBG)
> “In retrospect, the OPEC+ decision turned out to be the right one for supporting the stability of the market and the industry,” said the Saudi energy minister defending their 2 MMBbl/d output cut from Nov ’22 to Dec ‘23
> OPEC+ will continue to be proactive and preemptive regarding changes across the oil markets amid heightened uncertainty and volatility, added Bin Salman yesterday. The comments indicate that OPEC+ may continue to keep supply tight.
Biden declares the Iran talks "dead" in a recently released video
> “It is dead, but we’re not gonna announce it,” said Biden in the video, responding to a public question
> The comments by Biden were made during a political rally on Nov 4 but only circulated publicly on Tuesday
> “There is no progress happening with respect to the Iran deal now. We don’t anticipate any progress anytime in the near future. That’s just not our focus,” said White House national security spokesperson John Kirby on Tuesday.
Iran is now selling "Suicide Drones" to Russia that are being used against Ukraine.
Natural Gas
Natural gas prices are higher by 3.35% to $5.50 this morning
> The Summer ’23 seasonal strip is up 5c to $4.76, and the Winter ‘23/’24 strip is up 4c to $5.30
> Weather forecasts shifted cooler today
> The forecast for the Northeast region is cooler by 25 °F over the 1-15 day period, while the Midwest forecast is cooler by 30 °F over the same period
US and Canadian gas output could hit constraints in 2023 (Reuters)
> While production from both countries is expected to exceed record levels in 2023, pipeline bottlenecks may slow production growth
> More infrastructure is needed to keep up with growth in the Permian and Haynesville and to avoid those regions becoming constrained
> Rapid production growth in Canada has led to constraints on the NGTL pipeline system, which resulted in gas prices in Alberta briefly trading below $0 this year. The CEO of Williams Cos said that "It’s not production that can’t keep up, it’s just simply infrastructure constraints”.
US approves permits for Sempra to re-export LNG from Mexico (Reuters)
> The Department of Energy approved permits on Tuesday that will allow Sempra Energy to ship natural gas from the US to Mexico to be liquefied and exported from the company’s planned LNG projects
> The permits allow for Sempra to ship 1.85 Bcf/d to the proposed Costa Azul and Vista Pacifico projects
> The first phase of the Costa Azul export plant is expected to come online in mid-2025, while the Vista Pacifico project has not begun construction yet
There is a "Structural Change" underway in the U.S. natural gas market: As the U.S. gains more access to the global market, U.S natural gas prices will be pressured higher by the bidding war between Asia and Europe for LNG cargos.
> WTI is up $1.49 to $77.72/bbl, and Brent is up $1.56 to $81.55/bbl.
> Natural gas is up 17.6c to $5.502/MMBtu.
AEGIS Notes
Oil
Oil continues to rally for a third-consecutive day
> Feb ’23 WTI gains $1.49 this morning to trade near $78/Bbl
> The API estimates U.S. crude inventories to fall by about 3.1 MMBbl for the week ending December 16
> Concerns of a spike in Covid-19 cases in China as the nation continues to drop its Covid-zero policy may add downward pressure to crude prices
> TC Energy delayed the 0.622 Bbl/d Keystone Pipeline’s restart plans until December 28 or 29
Saudi Energy Minister says OPEC+’s decision to cut oil output was spot on (BBG)
> “In retrospect, the OPEC+ decision turned out to be the right one for supporting the stability of the market and the industry,” said the Saudi energy minister defending their 2 MMBbl/d output cut from Nov ’22 to Dec ‘23
> OPEC+ will continue to be proactive and preemptive regarding changes across the oil markets amid heightened uncertainty and volatility, added Bin Salman yesterday. The comments indicate that OPEC+ may continue to keep supply tight.
Biden declares the Iran talks "dead" in a recently released video
> “It is dead, but we’re not gonna announce it,” said Biden in the video, responding to a public question
> The comments by Biden were made during a political rally on Nov 4 but only circulated publicly on Tuesday
> “There is no progress happening with respect to the Iran deal now. We don’t anticipate any progress anytime in the near future. That’s just not our focus,” said White House national security spokesperson John Kirby on Tuesday.
Iran is now selling "Suicide Drones" to Russia that are being used against Ukraine.
Natural Gas
Natural gas prices are higher by 3.35% to $5.50 this morning
> The Summer ’23 seasonal strip is up 5c to $4.76, and the Winter ‘23/’24 strip is up 4c to $5.30
> Weather forecasts shifted cooler today
> The forecast for the Northeast region is cooler by 25 °F over the 1-15 day period, while the Midwest forecast is cooler by 30 °F over the same period
US and Canadian gas output could hit constraints in 2023 (Reuters)
> While production from both countries is expected to exceed record levels in 2023, pipeline bottlenecks may slow production growth
> More infrastructure is needed to keep up with growth in the Permian and Haynesville and to avoid those regions becoming constrained
> Rapid production growth in Canada has led to constraints on the NGTL pipeline system, which resulted in gas prices in Alberta briefly trading below $0 this year. The CEO of Williams Cos said that "It’s not production that can’t keep up, it’s just simply infrastructure constraints”.
US approves permits for Sempra to re-export LNG from Mexico (Reuters)
> The Department of Energy approved permits on Tuesday that will allow Sempra Energy to ship natural gas from the US to Mexico to be liquefied and exported from the company’s planned LNG projects
> The permits allow for Sempra to ship 1.85 Bcf/d to the proposed Costa Azul and Vista Pacifico projects
> The first phase of the Costa Azul export plant is expected to come online in mid-2025, while the Vista Pacifico project has not begun construction yet
There is a "Structural Change" underway in the U.S. natural gas market: As the U.S. gains more access to the global market, U.S natural gas prices will be pressured higher by the bidding war between Asia and Europe for LNG cargos.