Oil & Gas Prices - April 27
Posted: Thu Apr 27, 2023 11:16 am
I am back from my trip to San Diego for the ADISA conference. It went well but I had a flat tire back at the Houston Hobby Airport. Spent this morning getting the car to NTB for new tires. Car trouble sucks!
Opening Prices:
> WTI is up $0.39 to $74.69/bbl, and Brent is up $0.41 to $78.10/bbl.
> Natural gas is up 2.8c to $2.333/MMBtu. (As of 08:43 AM CDT)
AEGIS Notes
OIl
Oil trades slightly higher after giving up all of the OPEC-driven gains amid persistent demand fears
June ’23 WTI gained 41c this morning to trade around $74.71/Bbl
Weakening demand for fuel and a general sense of caution in the global markets are putting downward pressure on prices < I sure don't see anything in the EIA's weekly petroleum report that shows weaking demand for fuel in the U.S. IMO the recent weakness is "Fear of a Recession" and the paper traders needing to close out their long NYMEX contracts at the end of a month.
The market awaits the Fed’s rate hike decision next week for indications about the health of the economy
OPEC Chief blames lack of Investment for oil price volatility (BBG)
OPEC+ Secretary General Haitham AL-Ghais said on Wednesday that volatility in oil prices is being driven by calls to halt investment rather than OPEC+’s policies
He added that factors impacting markets include COVID-19, monetary policy, stock movements, SPR releases, etc
The remarks come after IEA Executive Director Fatih Birol advised OPEC+ to be cautious about boosting oil prices
OPEC+ sees no need for further output cuts despite lower Chinese demand, says Russian Deputy Prime Minister Novak (BBG, Reuters)
However, he added that the cartel can always make adjustments if needed < OPEC will defend $80/bbl Brent.
Novak said that Russia had reached its targeted output this month, with oil and gas condensate production expected to drop from 535 million tons in 2022 to 515 million tons in 2023 due to planned cuts
Keep in mind that all of my forecasts and stock valuations are based on WTI averaging $75/bbl in both Q1 and Q2 of 2023. So far, WTI has averaged more than $75/bbl YTD.
Natural Gas
The now prompt June contract was up near 2.2c or 1.5% Thursday morning to $2.33/MMBtu
Freeport LNG has edged to yet another feedgas record in this morning’s early nomination as the facility took in 2.345 Bcf/d
Total U.S. LNG flows are off their record high, however at 13.8 Bcf/d, as Cameron LNG had reduced intake
Later this morning, the EIA is expected to announce a 74 Bcf injection into underground storage (BBG)
A 74 Bcf injection would be about 70% larger than the five-year average of 43 Bcf and larger than the 42 Bcf injection last year
U.S. stocks would climb to 2,004 Bcf and widen the storage surplus to 358 Bcf
AEGIS notes that low gas prices have been required and may continue to be necessary in order to avoid too much gas in storage come winter. Our models show an injection season exit rate near 4.1 Tcf with the current daily oversupply of 2 Bcf.
Raymond James new HH ngas forecasts are $2.74A for Q1, $2.30 for Q2, $2.85 for Q3, $3.30 for Q4 and $3.25 for 2024. For 2025, RJ sees a big increase in LNG export capacity that should push HH ngas to $5.00 for the year. All of our gassers will be fine at these prices.
Opening Prices:
> WTI is up $0.39 to $74.69/bbl, and Brent is up $0.41 to $78.10/bbl.
> Natural gas is up 2.8c to $2.333/MMBtu. (As of 08:43 AM CDT)
AEGIS Notes
OIl
Oil trades slightly higher after giving up all of the OPEC-driven gains amid persistent demand fears
June ’23 WTI gained 41c this morning to trade around $74.71/Bbl
Weakening demand for fuel and a general sense of caution in the global markets are putting downward pressure on prices < I sure don't see anything in the EIA's weekly petroleum report that shows weaking demand for fuel in the U.S. IMO the recent weakness is "Fear of a Recession" and the paper traders needing to close out their long NYMEX contracts at the end of a month.
The market awaits the Fed’s rate hike decision next week for indications about the health of the economy
OPEC Chief blames lack of Investment for oil price volatility (BBG)
OPEC+ Secretary General Haitham AL-Ghais said on Wednesday that volatility in oil prices is being driven by calls to halt investment rather than OPEC+’s policies
He added that factors impacting markets include COVID-19, monetary policy, stock movements, SPR releases, etc
The remarks come after IEA Executive Director Fatih Birol advised OPEC+ to be cautious about boosting oil prices
OPEC+ sees no need for further output cuts despite lower Chinese demand, says Russian Deputy Prime Minister Novak (BBG, Reuters)
However, he added that the cartel can always make adjustments if needed < OPEC will defend $80/bbl Brent.
Novak said that Russia had reached its targeted output this month, with oil and gas condensate production expected to drop from 535 million tons in 2022 to 515 million tons in 2023 due to planned cuts
Keep in mind that all of my forecasts and stock valuations are based on WTI averaging $75/bbl in both Q1 and Q2 of 2023. So far, WTI has averaged more than $75/bbl YTD.
Natural Gas
The now prompt June contract was up near 2.2c or 1.5% Thursday morning to $2.33/MMBtu
Freeport LNG has edged to yet another feedgas record in this morning’s early nomination as the facility took in 2.345 Bcf/d
Total U.S. LNG flows are off their record high, however at 13.8 Bcf/d, as Cameron LNG had reduced intake
Later this morning, the EIA is expected to announce a 74 Bcf injection into underground storage (BBG)
A 74 Bcf injection would be about 70% larger than the five-year average of 43 Bcf and larger than the 42 Bcf injection last year
U.S. stocks would climb to 2,004 Bcf and widen the storage surplus to 358 Bcf
AEGIS notes that low gas prices have been required and may continue to be necessary in order to avoid too much gas in storage come winter. Our models show an injection season exit rate near 4.1 Tcf with the current daily oversupply of 2 Bcf.
Raymond James new HH ngas forecasts are $2.74A for Q1, $2.30 for Q2, $2.85 for Q3, $3.30 for Q4 and $3.25 for 2024. For 2025, RJ sees a big increase in LNG export capacity that should push HH ngas to $5.00 for the year. All of our gassers will be fine at these prices.