Oil & Gas Prices - Mar 17
Posted: Fri Mar 17, 2023 9:04 am
Happy St. Patrick's Day
Opening Prices:
> WTI is down $0.10 to $68.25/bbl, and Brent is down $0.29 to $74.41/bbl.
> Natural gas is down -9.7c to $2.417/MMBtu. (As of 07:42 AM CDT)
Natural gas furnaces across Texas will stay on all weekend.
AEGIS Notes
Oil
Oil heads for the largest weekly decline in three months
WTI lost 10c this morning to trade around $68/Bbl but is $8/Bbl, or 10% lower for the week
Crude prices plummeted to their lowest levels in more than a year this week following the banking turmoil
On Wednesday, Prompt WTI and Brent reached their respective lows of $65.65/Bbl and $71.67/Bbl before recovering some of their losses on Thursday
Crude cut some of its losses as the U.S. dollar weakened, and equities rose earlier after banks, including Credit Suisse and First Republic Bank, received cash deposits from larger banks
The market is also expecting an OPEC+ response following yesterday's meeting between Saudi Arabian and Russian officials to " promote market balance and stability"
Additionally, the next FOMC meeting is scheduled for March 21 and 22
U.S. won't rush to fill petroleum reserve, says top Biden adviser (BBG)
Amos Hochstein, the Special Presidential Coordinator for Global Infrastructure and Energy Security, said yesterday that despite the recent drop in prices, the U.S. remains committed to refilling the SPR but will not rush to do so
The U.S. should " wait and see how this crisis right now impacts the oil and industry, production and what the profile is," added Hochstein
The SPR is currently at 371.6 MMBbl, the lowest level since the 1980s, as a result of the 180 MMBbl release last year to tame gasoline prices
The Biden administration had previously laid out a plan to refill the SPR at prices around $70/Bbl
Saudi Arabia and Russia meet to discuss market stability in Riyadh (BBG)
Saudi energy minister Prince Abdulaziz bin Salman met with Russian deputy prime minister Alexander Novak in Riyadh yesterday amid this week’s crude sell-off to discuss global oil markets
The two discussed “oil markets and efforts of the OPEC+ group to promote market balance and stability” and “stressed their countries’ commitment to the decision made by OPEC+ late October to reduce production by 2 MMBbl/d until the end of 2023” according to Saudi Arabia’s state news agency
G7 rejects lowering price cap for Russian oil (WSJ, BBG)
Despite the recent drop in oil prices and requests from several European states to lower the cap, the G7 intends to maintain its $60/Bbl price cap on Russian oil exports, according to a WSJ
According to people familiar with the matter, Biden briefed European Commission President Ursula von der Leyen last week that there is no intention of adjusting the sanctions on Russia's crude oil
Bloomberg reported on Tuesday that Estonia, Lithuania, and Poland are recommending lowering the cap to $51.45, which would be 5% less than market prices for Russian oil
According to IEA’s February Monthly report, Russia's average export price for crude oil was $52.48/Bbl on a "free on board" basis
Natural Gas
Natural gas prices are down 4% this morning and set to finish the week lower
Weather forecasts have shifted warmer, with the Lower 48 forecast warming by 11.8 °F in the 1-15 day period
The Northeast regions forecast warmed by 17.7 °F and the Midwest regions forecast warmed by 23.7 °F
Outside my house it is much colder than normal for this time of year. Low under 40F expected this weekend.
Repsol cancels plans for Canadian LNG project (Reuters)
The company said that the cost of shipping gas to Canada’s east coast is too costly for the project to be economical
Repsol has been looking into constructing an export facility adjacent to the Saint John LNG import facility in New Brunswick
The feedgas for the terminal would have to be shipped thousands of miles from western Canada, and would likely require additional pipeline capacity
California launches investigation into high winter natural gas prices (Reuters)
The California Public Utilities Commission is investigating what caused spot prices at PCG&E Citygate to rise 125% to $56.429 in December 2022
The commission is concerned that prices could spike again in the summer and is looking at ways to mitigate volatility < Here is my suggestion: Build more pipelines that can bring clean burning natural gas to your state!
Opening Prices:
> WTI is down $0.10 to $68.25/bbl, and Brent is down $0.29 to $74.41/bbl.
> Natural gas is down -9.7c to $2.417/MMBtu. (As of 07:42 AM CDT)
Natural gas furnaces across Texas will stay on all weekend.
AEGIS Notes
Oil
Oil heads for the largest weekly decline in three months
WTI lost 10c this morning to trade around $68/Bbl but is $8/Bbl, or 10% lower for the week
Crude prices plummeted to their lowest levels in more than a year this week following the banking turmoil
On Wednesday, Prompt WTI and Brent reached their respective lows of $65.65/Bbl and $71.67/Bbl before recovering some of their losses on Thursday
Crude cut some of its losses as the U.S. dollar weakened, and equities rose earlier after banks, including Credit Suisse and First Republic Bank, received cash deposits from larger banks
The market is also expecting an OPEC+ response following yesterday's meeting between Saudi Arabian and Russian officials to " promote market balance and stability"
Additionally, the next FOMC meeting is scheduled for March 21 and 22
U.S. won't rush to fill petroleum reserve, says top Biden adviser (BBG)
Amos Hochstein, the Special Presidential Coordinator for Global Infrastructure and Energy Security, said yesterday that despite the recent drop in prices, the U.S. remains committed to refilling the SPR but will not rush to do so
The U.S. should " wait and see how this crisis right now impacts the oil and industry, production and what the profile is," added Hochstein
The SPR is currently at 371.6 MMBbl, the lowest level since the 1980s, as a result of the 180 MMBbl release last year to tame gasoline prices
The Biden administration had previously laid out a plan to refill the SPR at prices around $70/Bbl
Saudi Arabia and Russia meet to discuss market stability in Riyadh (BBG)
Saudi energy minister Prince Abdulaziz bin Salman met with Russian deputy prime minister Alexander Novak in Riyadh yesterday amid this week’s crude sell-off to discuss global oil markets
The two discussed “oil markets and efforts of the OPEC+ group to promote market balance and stability” and “stressed their countries’ commitment to the decision made by OPEC+ late October to reduce production by 2 MMBbl/d until the end of 2023” according to Saudi Arabia’s state news agency
G7 rejects lowering price cap for Russian oil (WSJ, BBG)
Despite the recent drop in oil prices and requests from several European states to lower the cap, the G7 intends to maintain its $60/Bbl price cap on Russian oil exports, according to a WSJ
According to people familiar with the matter, Biden briefed European Commission President Ursula von der Leyen last week that there is no intention of adjusting the sanctions on Russia's crude oil
Bloomberg reported on Tuesday that Estonia, Lithuania, and Poland are recommending lowering the cap to $51.45, which would be 5% less than market prices for Russian oil
According to IEA’s February Monthly report, Russia's average export price for crude oil was $52.48/Bbl on a "free on board" basis
Natural Gas
Natural gas prices are down 4% this morning and set to finish the week lower
Weather forecasts have shifted warmer, with the Lower 48 forecast warming by 11.8 °F in the 1-15 day period
The Northeast regions forecast warmed by 17.7 °F and the Midwest regions forecast warmed by 23.7 °F
Outside my house it is much colder than normal for this time of year. Low under 40F expected this weekend.
Repsol cancels plans for Canadian LNG project (Reuters)
The company said that the cost of shipping gas to Canada’s east coast is too costly for the project to be economical
Repsol has been looking into constructing an export facility adjacent to the Saint John LNG import facility in New Brunswick
The feedgas for the terminal would have to be shipped thousands of miles from western Canada, and would likely require additional pipeline capacity
California launches investigation into high winter natural gas prices (Reuters)
The California Public Utilities Commission is investigating what caused spot prices at PCG&E Citygate to rise 125% to $56.429 in December 2022
The commission is concerned that prices could spike again in the summer and is looking at ways to mitigate volatility < Here is my suggestion: Build more pipelines that can bring clean burning natural gas to your state!