Oil & Gas Prices - April 21
Posted: Fri Apr 21, 2023 9:25 am
Opening Prices:
> WTI is up $0.43 to $77.80/bbl, and Brent is up $0.45 to $81.55/bbl.
> Natural gas is down -1.8c to $2.231/MMBtu.
AEGIS Notes with my comments in blue
Oil
Oil heads for a weekly loss as concerns about an economic slowdown outweigh tight supply
May ’23 WTI gained 43c this morning to trade around $77.80/Bbl
Prompt month WTI lost nearly $4.80 this week, giving up most of the OPEC-driven gains
Concerns about economic growth and weak product cracks countered OPEC+’s off-cycle cut and halted Kurdish exports
A stronger dollar also weighed on crude prices this week, making dollar-denominated commodities more expensive for buyers holding other currencies
Kurdistan’s crude exports (0.45 MMBbl/d) remain halted despite Iraq hoping to restart exports this week
The U.S. could begin to refill the SPR in 3Q2023 (BBG)
The U.S. could begin refilling its Strategic Petroleum Reserve (SPR) in the fall, according to Amos Hochstein, the U.S. Special Presidential Envoy for Energy Diplomacy < IMO this is just political BS meant to cool down Saudi Arabia. Team Biden must know that if they start putting oil back into the SPR this year that it will increase oil and gasoline prices.
If oil prices are "in the right place" by early fall, the United States is "100% committed to replenishing the SPR over a period of time," said Hochstein
Hochstein added that the timeline for refilling would also depend on SPR’s maintenance and the administration’s ability to manage the mandated sale of 26 MMBbl by June 30 < So, they are still draining the SPR.
Natural Gas
Natural gas is trading around $2.23, heading for a second consecutive weekly gain
Yesterday the EIA reported a storage build of 75 Bcf, bringing the storage surplus to 329 Bcf above the five-year average, and 488 Bcf above year-ago levels < We are in the shoulder season when storage builds are expected and can be large if the weather is mild, which it was during the week ending April 14. I expect the build for the week ending April 21 to be smaller thanks to some winter weather up north.
Rio Grande LNG and Texas LNG approved following FERC review (BBG)
Two LNG export plants planned for the port of Brownsville in south Texas have been reapproved by FERC after the commission determined that the projects would not lead to environmental justice concerns
Rio Grande LNG will have a capacity of 3.60 Bcf/d, and the smaller Texas LNG will have a capacity of 0.53 Bcf/d
The FERC decision comes amid a push within the regulatory agency to speed up the permitting process that often delays energy infrastructure projects
More LNG stored at sea as Asian inventories rise and demand falls (Reuters)
Low demand in the spot market has resulted in large volumes of gas being stored on LNG carriers, awaiting offtake
Kpler said that "There are currently more floating volumes on a global level, and the increase is coming out of Asia”
China, normally a net importer of LNG, exported a record 157 thousand tons of LNG in February
> WTI is up $0.43 to $77.80/bbl, and Brent is up $0.45 to $81.55/bbl.
> Natural gas is down -1.8c to $2.231/MMBtu.
AEGIS Notes with my comments in blue
Oil
Oil heads for a weekly loss as concerns about an economic slowdown outweigh tight supply
May ’23 WTI gained 43c this morning to trade around $77.80/Bbl
Prompt month WTI lost nearly $4.80 this week, giving up most of the OPEC-driven gains
Concerns about economic growth and weak product cracks countered OPEC+’s off-cycle cut and halted Kurdish exports
A stronger dollar also weighed on crude prices this week, making dollar-denominated commodities more expensive for buyers holding other currencies
Kurdistan’s crude exports (0.45 MMBbl/d) remain halted despite Iraq hoping to restart exports this week
The U.S. could begin to refill the SPR in 3Q2023 (BBG)
The U.S. could begin refilling its Strategic Petroleum Reserve (SPR) in the fall, according to Amos Hochstein, the U.S. Special Presidential Envoy for Energy Diplomacy < IMO this is just political BS meant to cool down Saudi Arabia. Team Biden must know that if they start putting oil back into the SPR this year that it will increase oil and gasoline prices.
If oil prices are "in the right place" by early fall, the United States is "100% committed to replenishing the SPR over a period of time," said Hochstein
Hochstein added that the timeline for refilling would also depend on SPR’s maintenance and the administration’s ability to manage the mandated sale of 26 MMBbl by June 30 < So, they are still draining the SPR.
Natural Gas
Natural gas is trading around $2.23, heading for a second consecutive weekly gain
Yesterday the EIA reported a storage build of 75 Bcf, bringing the storage surplus to 329 Bcf above the five-year average, and 488 Bcf above year-ago levels < We are in the shoulder season when storage builds are expected and can be large if the weather is mild, which it was during the week ending April 14. I expect the build for the week ending April 21 to be smaller thanks to some winter weather up north.
Rio Grande LNG and Texas LNG approved following FERC review (BBG)
Two LNG export plants planned for the port of Brownsville in south Texas have been reapproved by FERC after the commission determined that the projects would not lead to environmental justice concerns
Rio Grande LNG will have a capacity of 3.60 Bcf/d, and the smaller Texas LNG will have a capacity of 0.53 Bcf/d
The FERC decision comes amid a push within the regulatory agency to speed up the permitting process that often delays energy infrastructure projects
More LNG stored at sea as Asian inventories rise and demand falls (Reuters)
Low demand in the spot market has resulted in large volumes of gas being stored on LNG carriers, awaiting offtake
Kpler said that "There are currently more floating volumes on a global level, and the increase is coming out of Asia”
China, normally a net importer of LNG, exported a record 157 thousand tons of LNG in February