Oil & Gas Prices - May 30

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dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Oil & Gas Prices - May 30

Post by dan_s »

Opening Prices:
> WTI is down $1.38 to $71.29/bbl, and Brent is down $1.55 to $75.40/bbl.
> Natural gas is down -8.9c to $2.328/MMBtu.

AEGIS Notes
Oil

Oil trades lower after two weeks of gains
July ’23 WTI lost $1.38 this morning to trade around $71.29/Bbl

Concerns that some lawmakers might oppose a deal that would raise the debt ceiling in the U.S. weighed on prices (Reuters)
An agreement agreed upon by Biden and McCarthy needs to overcome a divided U.S. Congress by June 5

Major producers, Saudi Arabia, and Russia, have expressed contrasting views on the outcome of the upcoming OPEC+ meeting scheduled for June 3-4
Saudi Arabia's Energy Minister, Prince Abdulaziz bin Salman, recently cautioned oil short-sellers to "watch out"
Conversely, Russia has conveyed that OPEC+ probably won't implement any more measures at the upcoming meeting

Additionally, money managers increased their net-long positions in Brent oil by over 30,000 contracts last week, marking the largest uptick in two months, following the Saudi warning (Bloomberg)

Russia’s seaborne diesel exports to surge by a third in June (Bloomberg)
Russia is set to escalate its daily diesel exports by a third in June, targeting an average of 0.53 MMBbl/d < OECD countries will need every drop of diesel that they can get. U.S. distillate inventories are 18% below normal at the high point in demand for diesel.
Russian oil firms have found new markets in the Middle East and Latin America, disrupting traditional global diesel flows following the EU’s ban on Russian oil imports
The diesel export rise is driven by potential domestic fuel subsidy cuts and the completion of refinery maintenance

Natural Gas

Natural gas prices are trading lower, around $2.36, with July now the prompt month contract
Weather forecasts are mostly unchanged from Friday, with slightly below-normal temperatures expected over the next two weeks
Below-normal temperatures should lead to reduced demand for natural gas from the power sector

LNG feedgas demand has recovered to about 13.2-Bcf/d, as Cameron LNG and Corpus Christi LNG have concluded maintenance

Mountain Valley Pipeline included in US debt bill (Reuters)
The text of the proposed budget deal to avert a debt crisis includes language that would streamline the approval process for the pipeline
The project still requires permitting from West Virginia, where it could continue to be held up in court
Equitrans said in early May that the project could be finished by the end of 2023, although there remains significant risk and uncertainty
The Mountain Valley Pipeline would add 2-Bcf/d of takeaway capacity to the Appalachian region
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - May 30

Post by dan_s »

Closing Prices:
> Prompt-Month WTI (Jul 23) was down $-3.21 on the day, to settle at $69.46 < IMO today's selloff is just the BS in Washington related to the debt limit. We are not going to default on our debt, but we do have idiots running the country. So sad.
> Prompt-Month Henry Hub (Jul 23) was down $-0.090 on the day, to settle at $2.327

Trading Economics
"WTI crude futures sank more than 4% to below $70 a barrel on Tuesday, amid concerns surrounding the passage of the debt deal in the US Congress, after several Republicans have stated that they will not vote in favor of it. At the same time, prospects of lower demand, specially in China, added further downward pressure. The upcoming release of PMI data this week is expected to provide additional insights into the state of the subdued economic recovery. Meanwhile, doubts persist on whether OPEC+ will cut production during a meeting on June 4 after Saudi Arabia Energy Minister Prince Abdulaziz bin Salman warned short sellers to “watch out” for potential consequences last week. In contrast, Russian Deputy Prime Minister Alexander Novak stated that he anticipated no new measures from OPEC+ as the group just implemented production cuts this month." < No matter what OPEC+ does, demand for oil will exceed supply in June.

"US natural gas futures remained below $2.3/MMBtu, the lowest in more than 2 weeks, as strong US production more than compensated for a decline in Canadian imports, and demand is expected to decline on milder weather. The average gas output in the US Lower 48 states has increased to 101.7 billion cubic feet per day in May, surpassing April's record of 101.4 bcfd. In contrast, Canadian exports to the U.S. have declined to a 25-month low of 6.4 bcfd on May 17th from 8.5 bcfd on May 4th, as wildfires in Alberta have compelled energy firms to curtail oil and gas production. Looking ahead, weather forecasts indicate that temperatures in the Lower 48 states will likely remain near normal levels through June 14th. Additionally, US gas demand, including exports, is projected to rise to 92.9 bcfd next week, up from 89.4 bcfd this week. However, this increase is lower than previously anticipated based on Friday's projection."
Dan Steffens
Energy Prospectus Group
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