Oil & Gas Prices - Mar 14
Posted: Tue Mar 14, 2023 9:33 am
Opening Prices:
> WTI is down $1.48 to $73.32/bbl, and Brent is down $1.34 to $79.43/bbl. (As of 7:47 AM CDT)
> Natural gas is up 0.9c to $2.615/MMBtu.
AEGIS Notes with my comments in blue
Oil
Oil extends losses as US inflation modestly cools in February but still remains well above Fed targets
April ’23 WTI lost $1.48 this morning to trade around $73.32/Bbl
US inflation slowed to 6% in February, matching expectations and down from 6.4% in January but still well above targets (WSJ)
This decline might ease the pressure for aggressive rate hikes from the Federal Reserve
The core CPI, which excludes food and energy prices, rose 0.5% last month and was up 5.5% from a year earlier, according to a Labor Department report on Tuesday
"Fear of the Fed" will continue to be the #1 "noise" keeping pressure on oil prices.
Crude remains under pressure amid economic concerns following the failure of Silicon Valley Bank last week
The focus continues to be on concerns about tightening monetary policy ahead of the FOMC meeting next week < Kind of sad that fear of what our own government (idiots in DC) will do next is our primary concern.
Russia’s oil exports rebound as India buys more cargoes (BBG)
Russia's seaborne crude exports recovered 40% of the last week's loss, rising to 3.3 MMBbl/d for the week ending March 10
India has become the largest buyer of Russian seaborne crude since November, surpassing China, and has consistently bought more than China ever since
Despite the Kremlin's announcement of a retaliatory 0.5 MMBbl/d output cut in March, vessel tracking data monitored by Bloomberg shows no indication of any impact on the oil flows
Natural Gas
Natural gas prices are steady after climbing more than 7% yesterday
The Summer ’23 seasonal strip is trading around $3.02, and the Winter ‘23/’24 strip is trading near $3.88 < Thank the Lord for Winter Storm Sage!
Weather forecasts shifted colder, with the Lower 48 forecast cooling by 6.9 °F
LNG expansion could lower global gas prices after 2027 (Reuters) and raise U.S. gas prices
Proposed LNG export facilities are posed to increase global LNG supply by 67% by 2030
Renewables will increasingly compete with gas as wind, solar, and nuclear-powered generation increases over the next decade
Many analysts believe that global gas prices will remain strong until 2027 when the majority of planned LNG facilities will be online
High prices in 2022 curbed medium-term demand, with China decreasing LNG purchases by 20% along with reductions by other Asian buyers
MY TAKE: Last year LNG prices spiked in Asia and Europe to over $50/Mmbtu at the height of the Bidding War. Looking at my screen this morning, gas prices in Asia (JKM index) are $14.25 and $15.62 in Europe (TTF Index). Under normal conditions, global natural gas prices stay around the energy equivalent price of 1/6th the price of crude oil. So if Brent is $80/bbl, gas prices outside of the U.S. should be $13-$14. U.S. LNG export capacity is on-track to increase by 8 Bcfpd by 2027 to over 22 Bcfpd. Domestic demand for U.S. natural gas is also increasing each year. More export capacity should move U.S. gas prices toward international gas prices. Wind and Solar have more impact on coal demand.
Venture Global moving forward with phase 2 of the Plaquemines LNG terminal (Reuters)
Venture Global CEO Mike Sabel said, “Venture Global is proud to announce a positive FID for phase two of Plaquemines LNG, less than 10 months after sanctioning phase one,”
The company said that this FID completes $21 billion in total project financing, the most ever done in the LNG space
Phase 1 is expected to be online in 2024, while phase 2 will be operational in 2025
> WTI is down $1.48 to $73.32/bbl, and Brent is down $1.34 to $79.43/bbl. (As of 7:47 AM CDT)
> Natural gas is up 0.9c to $2.615/MMBtu.
AEGIS Notes with my comments in blue
Oil
Oil extends losses as US inflation modestly cools in February but still remains well above Fed targets
April ’23 WTI lost $1.48 this morning to trade around $73.32/Bbl
US inflation slowed to 6% in February, matching expectations and down from 6.4% in January but still well above targets (WSJ)
This decline might ease the pressure for aggressive rate hikes from the Federal Reserve
The core CPI, which excludes food and energy prices, rose 0.5% last month and was up 5.5% from a year earlier, according to a Labor Department report on Tuesday
"Fear of the Fed" will continue to be the #1 "noise" keeping pressure on oil prices.
Crude remains under pressure amid economic concerns following the failure of Silicon Valley Bank last week
The focus continues to be on concerns about tightening monetary policy ahead of the FOMC meeting next week < Kind of sad that fear of what our own government (idiots in DC) will do next is our primary concern.
Russia’s oil exports rebound as India buys more cargoes (BBG)
Russia's seaborne crude exports recovered 40% of the last week's loss, rising to 3.3 MMBbl/d for the week ending March 10
India has become the largest buyer of Russian seaborne crude since November, surpassing China, and has consistently bought more than China ever since
Despite the Kremlin's announcement of a retaliatory 0.5 MMBbl/d output cut in March, vessel tracking data monitored by Bloomberg shows no indication of any impact on the oil flows
Natural Gas
Natural gas prices are steady after climbing more than 7% yesterday
The Summer ’23 seasonal strip is trading around $3.02, and the Winter ‘23/’24 strip is trading near $3.88 < Thank the Lord for Winter Storm Sage!
Weather forecasts shifted colder, with the Lower 48 forecast cooling by 6.9 °F
LNG expansion could lower global gas prices after 2027 (Reuters) and raise U.S. gas prices
Proposed LNG export facilities are posed to increase global LNG supply by 67% by 2030
Renewables will increasingly compete with gas as wind, solar, and nuclear-powered generation increases over the next decade
Many analysts believe that global gas prices will remain strong until 2027 when the majority of planned LNG facilities will be online
High prices in 2022 curbed medium-term demand, with China decreasing LNG purchases by 20% along with reductions by other Asian buyers
MY TAKE: Last year LNG prices spiked in Asia and Europe to over $50/Mmbtu at the height of the Bidding War. Looking at my screen this morning, gas prices in Asia (JKM index) are $14.25 and $15.62 in Europe (TTF Index). Under normal conditions, global natural gas prices stay around the energy equivalent price of 1/6th the price of crude oil. So if Brent is $80/bbl, gas prices outside of the U.S. should be $13-$14. U.S. LNG export capacity is on-track to increase by 8 Bcfpd by 2027 to over 22 Bcfpd. Domestic demand for U.S. natural gas is also increasing each year. More export capacity should move U.S. gas prices toward international gas prices. Wind and Solar have more impact on coal demand.
Venture Global moving forward with phase 2 of the Plaquemines LNG terminal (Reuters)
Venture Global CEO Mike Sabel said, “Venture Global is proud to announce a positive FID for phase two of Plaquemines LNG, less than 10 months after sanctioning phase one,”
The company said that this FID completes $21 billion in total project financing, the most ever done in the LNG space
Phase 1 is expected to be online in 2024, while phase 2 will be operational in 2025