Oil & Gas Prices - Feb 24
Posted: Fri Feb 24, 2023 10:09 am
Opening Prices:
> WTI is up $0.23 to $75.62/bbl, and Brent is up $0.28 to $82.49/bbl.
> Natural gas is up 1.1c to $2.325/MMBtu. < APR23 is now the front month NYMEX contract.
AEGIS Notes
Oil
Oil rebounds but heads for a modest weekly loss
April ’23 WTI gained 25c this morning to trade around $75/Bbl
Crude reversed earlier gains after hotter-than-expected PCE data (up 0.6%) bolstered the case for Fed to keep rates higher for longer
Yesterday, the EIA reported another large crude build (7.6 MMBbl), which brought U.S. inventories to their highest since May 2021
Also weighing on prices this week was a strong US dollar that is at a three-month high
Concerns about a slowdown in the economy persist despite a recovery in Chinese demand and a potentially tightening Russian supply
Diesel floods the EU as the Russian gap is filled with barrels from the east (BBG)
Initial Vortexa estimates show that Europe will import 1.55 MMBbl/d of diesel or gasoil-type fuel this month, slightly more than January's volumes
Europe was still able to import large amounts of diesel in February, largely because imports from the Middle East and Asia filled the Russian deficit
Diesel margins in Europe —the profit made from refining the fuel from crude—have declined steadily this month amid resilient fuel supply and weaker demand brought on by mild winter
Natural Gas
Natural gas prices are trading higher this morning, around $2.33
Weather forecasts have mostly shifted to warmer
The Northeast regions forecast gained 11.5 °F in the 6-10 day period, and the Southeast regions forecast gained 8.1 °F in the 11-15 day period
Yesterday the EIA reported a storage withdrawal of -71 Bcf, which is 92 Bcf less than the five-year average withdrawal for the corresponding week
Gas producers reducing activity (BBG)
The number of rigs operating in the Haynesville region has declined from a peak of 72 in December to 70 as natural gas prices have declined
Drilling by private producers has fallen 20% since December, and activity by all producers is expected to drop by as much as 50%, according to NexTier Oilfield Solutions
Chesapeake and Comstock have both said that they would be dropping rigs and reducing activity in the Haynesville region
Natural gas in U.S. storage facilities was 289 Bcf above the 5-year average on February 17, which is within the 5-year range and is tiny compared to the annual demand for U.S. natural gas of ~37.4 Tcf.
China Gas Holdings signs LNG supply deal with Venture Global (Reuters)
The company has signed two 20-year LNG supply deals for a total of two million tons per year starting in 2027
The LNG will come from Venture Global’s planned Plaquemines LNG facility
Pricing in the contract will be linked to Henry Hub, and the terms of the contract allow for the buyer to either import the gas to China or trade it in the global market
> WTI is up $0.23 to $75.62/bbl, and Brent is up $0.28 to $82.49/bbl.
> Natural gas is up 1.1c to $2.325/MMBtu. < APR23 is now the front month NYMEX contract.
AEGIS Notes
Oil
Oil rebounds but heads for a modest weekly loss
April ’23 WTI gained 25c this morning to trade around $75/Bbl
Crude reversed earlier gains after hotter-than-expected PCE data (up 0.6%) bolstered the case for Fed to keep rates higher for longer
Yesterday, the EIA reported another large crude build (7.6 MMBbl), which brought U.S. inventories to their highest since May 2021
Also weighing on prices this week was a strong US dollar that is at a three-month high
Concerns about a slowdown in the economy persist despite a recovery in Chinese demand and a potentially tightening Russian supply
Diesel floods the EU as the Russian gap is filled with barrels from the east (BBG)
Initial Vortexa estimates show that Europe will import 1.55 MMBbl/d of diesel or gasoil-type fuel this month, slightly more than January's volumes
Europe was still able to import large amounts of diesel in February, largely because imports from the Middle East and Asia filled the Russian deficit
Diesel margins in Europe —the profit made from refining the fuel from crude—have declined steadily this month amid resilient fuel supply and weaker demand brought on by mild winter
Natural Gas
Natural gas prices are trading higher this morning, around $2.33
Weather forecasts have mostly shifted to warmer
The Northeast regions forecast gained 11.5 °F in the 6-10 day period, and the Southeast regions forecast gained 8.1 °F in the 11-15 day period
Yesterday the EIA reported a storage withdrawal of -71 Bcf, which is 92 Bcf less than the five-year average withdrawal for the corresponding week
Gas producers reducing activity (BBG)
The number of rigs operating in the Haynesville region has declined from a peak of 72 in December to 70 as natural gas prices have declined
Drilling by private producers has fallen 20% since December, and activity by all producers is expected to drop by as much as 50%, according to NexTier Oilfield Solutions
Chesapeake and Comstock have both said that they would be dropping rigs and reducing activity in the Haynesville region
Natural gas in U.S. storage facilities was 289 Bcf above the 5-year average on February 17, which is within the 5-year range and is tiny compared to the annual demand for U.S. natural gas of ~37.4 Tcf.
China Gas Holdings signs LNG supply deal with Venture Global (Reuters)
The company has signed two 20-year LNG supply deals for a total of two million tons per year starting in 2027
The LNG will come from Venture Global’s planned Plaquemines LNG facility
Pricing in the contract will be linked to Henry Hub, and the terms of the contract allow for the buyer to either import the gas to China or trade it in the global market