Oil & Gas Prices - May 18
Posted: Thu May 18, 2023 9:00 am
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Opening Prices:
> WTI is down $0.39 to $72.44/bbl, and Brent is down $0.45 to $76.51/bbl.
> Natural gas is up 5.3c to $2.418/MMBtu.
AEGIS Notes
Oil
Oil trades lower despite optimism about progress in U.S. debt ceiling talks
June ’23 WTI lost 39c this morning to trade around $72.44/Bbl
Crude is down almost 10% this year as global economic headwinds remain a significant concern
President Biden and key congressional leaders are negotiating to raise the debt ceiling before the June 1 deadline (Reuters)
Last week’s 5 MMBbl build in inventories and the near two-month high of the U.S. dollar are weighing on prices
Alberta wildfires escalate, threatening oil production (BBG)
Persistent wildfires in Alberta endanger nearly 2.7 MMBbl/d of oil-sands production, with approximately 0.3 MMBbl/d currently halted, according to Rystad Energy
The number of active wildfires in Alberta rose to 91 on Wednesday, up from 86 just a day earlier
Despite improved weather, conditions are expected to worsen; 12,000 residents remain evacuated
India mulls refilling Strategic Reserve; Russian imports under consideration (BBG)
India may join the U.S. in the process of restocking depleted oil reserves, contemplating a massive refill of their strategic oil reserve
Potential import of 9.2 MMBbl by India is under discussion, with Russia as a possible supplier
Natural Gas
Natural gas prices are trading higher, around $2.41, extending gains from yesterday
The Winter ‘23/’24 strip is trading at $3.57, and the Summer ’24 strip is at $3.33
Lower 48 wind generation has fallen to a three-year low, which should lead to higher levels of natural gas usage by the power sector
Platts begins publishing renewable natural gas prices (WSJ)
Renewable natural gas, or biogas, is produced from landfills or dairy farms and is then injected into the gas pipeline system
Buyers in most of the US have been paying $25.25/MMBtu above Henry Hub, while buyers in California have been paying $28.40/MMBtu on average due to additional tax credits in the state
While production of biogas has grown sharply in recent years, it only accounts for 0.2% of all gas produced in the US
U.S. power grids vulnerable to extreme heat this summer (Reuters)
NERC released its summer outlook on Wednesday, stating that the US West, Midwest, Southeast, Texas, and New England are at risk of generation shortages under certain weather conditions
Heat waves, low wind output, and dependency on imported power are the biggest risks
Tight power supplies would likely lead to natural gas peaker plants running more than normal
----------------------
Opening Prices:
> WTI is down $0.39 to $72.44/bbl, and Brent is down $0.45 to $76.51/bbl.
> Natural gas is up 5.3c to $2.418/MMBtu.
AEGIS Notes
Oil
Oil trades lower despite optimism about progress in U.S. debt ceiling talks
June ’23 WTI lost 39c this morning to trade around $72.44/Bbl
Crude is down almost 10% this year as global economic headwinds remain a significant concern
President Biden and key congressional leaders are negotiating to raise the debt ceiling before the June 1 deadline (Reuters)
Last week’s 5 MMBbl build in inventories and the near two-month high of the U.S. dollar are weighing on prices
Alberta wildfires escalate, threatening oil production (BBG)
Persistent wildfires in Alberta endanger nearly 2.7 MMBbl/d of oil-sands production, with approximately 0.3 MMBbl/d currently halted, according to Rystad Energy
The number of active wildfires in Alberta rose to 91 on Wednesday, up from 86 just a day earlier
Despite improved weather, conditions are expected to worsen; 12,000 residents remain evacuated
India mulls refilling Strategic Reserve; Russian imports under consideration (BBG)
India may join the U.S. in the process of restocking depleted oil reserves, contemplating a massive refill of their strategic oil reserve
Potential import of 9.2 MMBbl by India is under discussion, with Russia as a possible supplier
Natural Gas
Natural gas prices are trading higher, around $2.41, extending gains from yesterday
The Winter ‘23/’24 strip is trading at $3.57, and the Summer ’24 strip is at $3.33
Lower 48 wind generation has fallen to a three-year low, which should lead to higher levels of natural gas usage by the power sector
Platts begins publishing renewable natural gas prices (WSJ)
Renewable natural gas, or biogas, is produced from landfills or dairy farms and is then injected into the gas pipeline system
Buyers in most of the US have been paying $25.25/MMBtu above Henry Hub, while buyers in California have been paying $28.40/MMBtu on average due to additional tax credits in the state
While production of biogas has grown sharply in recent years, it only accounts for 0.2% of all gas produced in the US
U.S. power grids vulnerable to extreme heat this summer (Reuters)
NERC released its summer outlook on Wednesday, stating that the US West, Midwest, Southeast, Texas, and New England are at risk of generation shortages under certain weather conditions
Heat waves, low wind output, and dependency on imported power are the biggest risks
Tight power supplies would likely lead to natural gas peaker plants running more than normal