Oil & Gas Prices - May 25
Posted: Thu May 25, 2023 9:09 am
Opening Prices:
> WTI is down $1.06 to $73.28/bbl, and Brent is down $1.01 to $77.35/bbl.
> Natural gas is down -1.0c to $2.388/MMBtu.
AEGIS Notes
Oil
OPEC+ is unlikely to make fresh cuts at its June meeting, said Russia’s Alexander Novak
Many analysts hold the same sentiment that the June 3 to 4 meeting won’t bring any surprises, even after Saudi Arabia delivered another warning to short sellers this week
A surprise production cut from OPEC+ last month initially scattered bearish oil speculators and sent prices rallying, but a cloudy global economy outlook helped prices subside (BBG)
Global oil trade flows are being redrawn (Bloomberg)
Western sanctions are channeling more barrels from Russia to Asia’s largest economies
China and India took more than 30% of their combined imports from Russia, Iran, and Venezuela, according to data from Kpler
Exports from traditional suppliers have collapsed as Asia has taken about 40% less from West Africa and the U.S.
Have you noticed that many of the policies coming out of Washington DC help China's economy?
Natural Gas
Natural gas prices are trading lower, around $2.38, reversing gains from yesterday
Weather forecast changes were mixed with the Northeast region forecast warming by 15 °F and the South Central’s cooling by 14.9 °F over the two-week forecast period
Today’s forecast changes lead to a net reduction in expected gas demand over the next two weeks
Gas output from the DJ Basin hasn’t grown despite low drilling costs (S&P)
Despite drilling costs being lower than in other regions, such as the Permian Basin, gas output has remained at about 2.35 Bcf/d for the past year and a half
Much of the cost difference comes from lower water and labor costs in the DJ Basin than in other basins
S&P expects production in the DJ Basin to grow only slightly before plateauing mid-decade due to core inventory exhaustion
Asia ramps up coal imports (Reuters)
China, India, Vietnam, and The Philippines accounted for 53% of global thermal coal imports and more than 70% of global power sector emissions
China’s imports of coal have grown 90% year over year as the Chinese economy recovers from their Covid-zero policy
Many market participants expected China’s reopening to tighten the global LNG market as economic activity recovered; however, Chinese LNG imports have not recovered as the country’s power sector has built new coal plants and shunned high-priced gas imports
> WTI is down $1.06 to $73.28/bbl, and Brent is down $1.01 to $77.35/bbl.
> Natural gas is down -1.0c to $2.388/MMBtu.
AEGIS Notes
Oil
OPEC+ is unlikely to make fresh cuts at its June meeting, said Russia’s Alexander Novak
Many analysts hold the same sentiment that the June 3 to 4 meeting won’t bring any surprises, even after Saudi Arabia delivered another warning to short sellers this week
A surprise production cut from OPEC+ last month initially scattered bearish oil speculators and sent prices rallying, but a cloudy global economy outlook helped prices subside (BBG)
Global oil trade flows are being redrawn (Bloomberg)
Western sanctions are channeling more barrels from Russia to Asia’s largest economies
China and India took more than 30% of their combined imports from Russia, Iran, and Venezuela, according to data from Kpler
Exports from traditional suppliers have collapsed as Asia has taken about 40% less from West Africa and the U.S.
Have you noticed that many of the policies coming out of Washington DC help China's economy?
Natural Gas
Natural gas prices are trading lower, around $2.38, reversing gains from yesterday
Weather forecast changes were mixed with the Northeast region forecast warming by 15 °F and the South Central’s cooling by 14.9 °F over the two-week forecast period
Today’s forecast changes lead to a net reduction in expected gas demand over the next two weeks
Gas output from the DJ Basin hasn’t grown despite low drilling costs (S&P)
Despite drilling costs being lower than in other regions, such as the Permian Basin, gas output has remained at about 2.35 Bcf/d for the past year and a half
Much of the cost difference comes from lower water and labor costs in the DJ Basin than in other basins
S&P expects production in the DJ Basin to grow only slightly before plateauing mid-decade due to core inventory exhaustion
Asia ramps up coal imports (Reuters)
China, India, Vietnam, and The Philippines accounted for 53% of global thermal coal imports and more than 70% of global power sector emissions
China’s imports of coal have grown 90% year over year as the Chinese economy recovers from their Covid-zero policy
Many market participants expected China’s reopening to tighten the global LNG market as economic activity recovered; however, Chinese LNG imports have not recovered as the country’s power sector has built new coal plants and shunned high-priced gas imports