Oil & Gas Prices - April 17

[dan_s]

Opening Prices:
> WTI is down $0.51 to $82.01/bbl, and Brent is down $0.49 to $85.82/bbl.
> Natural gas is up 16.2c to $2.276/MMBtu. (As of 08:19 AM CDT)

AEGIS Notes with my comments in blue
Crude Oil

Oil trades slightly lower ahead of Chinese economic data
May ’23 WTI lost 51c this morning to trade around $82/Bbl
The market awaits China’s GDP data this week for indications of demand recovery

IEA warned on Friday that the OPEC+ output cuts might drive up crude prices and worsen inflation
The supply cuts that begin in May could worsen the oil supply deficit and hurt the economic recovery, added the agency

The U.S. Dollar strengthened relative to its recent lows, making oil expensive for holders of other currencies

Global diesel market signals economic slowdown (BBG)
Diesel demand, an indicator of industrial activity and consumer spending, is weakening in major economies, indicating an economic slowdown in
China's trucking activity has decreased, and diesel's premium to crude futures has hit a one-year low in Europe
U.S. diesel demand is expected to drop by 2% in 2023, the biggest since 2016 (excluding the 2020 pandemic)
Trucking, which consumes a large portion of diesel, is facing a demand pullback due to declining factory output, home construction, and changing consumer spending patterns in the U.S., while China's manufacturing activity eased unexpectedly in March < Remember that last year's diesel demand was driven by the supply chain problems.

Natural Gas

Natural gas prices are up 8% to $2.27, extending gains from last week
The Summer ’23 strip is up 12.5c to $2.58, and the Winter ‘23/’24 strip is up 8.4c to $3.54 < Weather and market forces will rebalance the U.S. natural gas market in Q2 and wipe out most if not all of the natural gas storage surplus to the 5-year average. There is no "glut" of natural gas in the U.S. natural gas market; the largest gas market in the world.


Weather forecasts shifted cooler, with the Lower 48 forecast cooling by 7.3 °F over the two-week period
The Midwest regions forecast cooled by 22 °F and the Northeast’s by 12.3 °F < The Weather Channel: "Spring Snowstorm Prompts Blizzard Warnings"

European gas storage has limited space for refill (Reuters)
Seasonally high levels of gas in inventories will likely lead to smaller purchases of LNG this summer
On April 1, storage was 56% full, which is a record high for this time of year and leads most forecasters to expect an end-of-summer inventory level above total capacity
Demand is expected to increase this year relative to last year as gas consumers who were pushed out of the market by high prices return

US Forest Service issues new impact statement on Mountain Valley Pipeline
MVP is one step closer to receiving approval, with the US Forest Service reissuing its environmental impact statement
The issuance of the statement is one of the key hurdles that MVP will need to overcome to receive approval to finish the 2-bcf/d pipeline

[dan_s]

Closing Prices
> Prompt-Month WTI (May 23) was down $-1.69 on the day, to settle at $80.83 < Short sellers are going to test the resistance a few times before WTI moves higher.
> Prompt-Month Henry Hub (May 23) was up $0.161 on the day, to settle at $2.275 < Blizzard warnings in the Great Lake Region. What happened to Global Warming?