Oil & Gas Prices - April 28
Posted: Fri Apr 28, 2023 9:02 am
Opening Prices:
> WTI is up $0.51 to $75.27/bbl, and Brent is up $0.83 to $79.20/bbl.
> Natural gas is up 12.0c to $2.475/MMBtu.
AEGIS Notes with my comments in blue
Oil
Oil heads for a sixth consecutive monthly decline amid resurgent demand concerns
June ’23 WTI gained 55c this morning to trade around $75.27/Bbl
Oil prices erased all of the OPEC-driven gains this week amid concerns about the economic outlook, and weakness in fuel demand
The market awaits next week’s Fed meeting, with most expecting the Fed to deliver another rate hike < FEAR of a recession (not actual demand destruction) continues to keep a lid on oil prices. In the physical market, demand remains high and inventories of fuels (gasoline and diesel) remain well below the average for this time of year.
IMF warned both the ECB and BOE to be cautious of financial stress that could arise as a result of rising rates further to battle inflation in light of the recent banking crisis (BBG)
The IMF said that "a rapid tightening of monetary policy could lead to a sharp slowdown in economic activity and a rise in unemployment"
The market also continues to monitor China's Labor Day holiday next week to see if it signals a strong economic recovery
China's top refiner Sinopec expects the country's demand for refined oil products to grow by more than 10% in 2023 (BBG) < This the KEY fundamental driver for oil prices.
Sinopec VP Huang Wensheng said that the rapid recovery in mobility since the lifting of COVID-19 restrictions has led to increased gasoline consumption
He added that the government's economy-stabilizing policies had boosted demand from increased travel, infrastructure logistics, and agricultural activity
China’s total crude demand is important as it is nearly half of the global demand growth in 2023, which is expected to grow anywhere from 1.0 to 2.1 MMBbl/d
BTW OPEC+ starts cutting production by 1.6 million barrels per day next week.
Natural Gas
Natural gas soared early Friday morning as a major southbound pipeline declared force majure
The June contract was trading near $2.29/MMBbtu at 7 AM before quickly rallying to trade at $2.52 briefly < Back down to $2.39 at the time of this post. Unexpected "Black Swan" events like this trigger a lot of automated trades as short sellers keep very tight stop loss orders on their positions.
Columbia Gulf Transmission (CGT) declared force majure at the Cornith Compressor Station in Mississippi (Criterion Research)
The fire that caused the force majure was from a suspected lightning strike
Columbia Gulf was flowing around 2.3 Bcf/d southbound from Appalachia to Louisiana before the outage
Flows will be reduced to 1,750,000 Dth Total Capacity until further notice
AEGIS notes that gas prices rose as supply to the Henry Hub area was reduced
The reduction in flow from Appalachia will also impact price points upstream of the outage like Dom S, Tetco M2, TCO
> WTI is up $0.51 to $75.27/bbl, and Brent is up $0.83 to $79.20/bbl.
> Natural gas is up 12.0c to $2.475/MMBtu.
AEGIS Notes with my comments in blue
Oil
Oil heads for a sixth consecutive monthly decline amid resurgent demand concerns
June ’23 WTI gained 55c this morning to trade around $75.27/Bbl
Oil prices erased all of the OPEC-driven gains this week amid concerns about the economic outlook, and weakness in fuel demand
The market awaits next week’s Fed meeting, with most expecting the Fed to deliver another rate hike < FEAR of a recession (not actual demand destruction) continues to keep a lid on oil prices. In the physical market, demand remains high and inventories of fuels (gasoline and diesel) remain well below the average for this time of year.
IMF warned both the ECB and BOE to be cautious of financial stress that could arise as a result of rising rates further to battle inflation in light of the recent banking crisis (BBG)
The IMF said that "a rapid tightening of monetary policy could lead to a sharp slowdown in economic activity and a rise in unemployment"
The market also continues to monitor China's Labor Day holiday next week to see if it signals a strong economic recovery
China's top refiner Sinopec expects the country's demand for refined oil products to grow by more than 10% in 2023 (BBG) < This the KEY fundamental driver for oil prices.
Sinopec VP Huang Wensheng said that the rapid recovery in mobility since the lifting of COVID-19 restrictions has led to increased gasoline consumption
He added that the government's economy-stabilizing policies had boosted demand from increased travel, infrastructure logistics, and agricultural activity
China’s total crude demand is important as it is nearly half of the global demand growth in 2023, which is expected to grow anywhere from 1.0 to 2.1 MMBbl/d
BTW OPEC+ starts cutting production by 1.6 million barrels per day next week.
Natural Gas
Natural gas soared early Friday morning as a major southbound pipeline declared force majure
The June contract was trading near $2.29/MMBbtu at 7 AM before quickly rallying to trade at $2.52 briefly < Back down to $2.39 at the time of this post. Unexpected "Black Swan" events like this trigger a lot of automated trades as short sellers keep very tight stop loss orders on their positions.
Columbia Gulf Transmission (CGT) declared force majure at the Cornith Compressor Station in Mississippi (Criterion Research)
The fire that caused the force majure was from a suspected lightning strike
Columbia Gulf was flowing around 2.3 Bcf/d southbound from Appalachia to Louisiana before the outage
Flows will be reduced to 1,750,000 Dth Total Capacity until further notice
AEGIS notes that gas prices rose as supply to the Henry Hub area was reduced
The reduction in flow from Appalachia will also impact price points upstream of the outage like Dom S, Tetco M2, TCO