Oil & Gas Prices - June 1

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dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Oil & Gas Prices - June 1

Post by dan_s »

Opening Prices:
> WTI is up $0.21 to $68.30/bbl, and Brent is up $0.11 to $72.71/bbl.
> Natural gas is down -5.7c to $2.209/MMBtu.

AEGIS Notes
Oil

Oil trades slightly higher as the market weighs demand uncertainty and recession fears
July ’23 WTI gained 21c this morning to trade around $68.30/Bbl

The House approved a bill to suspend the debt ceiling and limit spending to prevent a potential default. The legislation still requires Senate approval

Uncertainty pervades the market ahead of the OPEC+ meeting on June 3-4 due to differing production policy views between Saudi Arabia and Russia
Resilient Russian exports and Fed's monetary tightening have been two of the biggest contributing factors to prices seeing nearly a 15% decline this year

A private survey by S&P Global indicated an unexpected increase in China's manufacturing activity in May, a finding that contradicted official data (BBG)
The mixed data raises doubts about China's economic recovery, suggesting a need for more evidence to gauge the growth outlook

Equities are trading higher, and the U.S. dollar weakened relative to its recent highs

OPEC+ Restricts Major Media Outlets from Upcoming Meeting (Bloomberg)
OPEC+ bars Bloomberg, Reuters, and WSJ reporters from their June 3-4 meeting
Uncharacteristically, for this meeting, OPEC+'s secretary sent invitations directly to selected journalists, deviating from the usual open-access policy
OPEC+ has not provided any clarification regarding this exclusionary decision

Natural Gas

Natural gas prices are lower, around $2.20, as weather forecasts shift cooler < Why hasn't the media reported the great news that the Polar Ice Cap has actually increased??? A few years ago the Wachos predicted that the ice cap would be gone by now and that the oceans would rise. As long as polar bears keep having baby polar bears, I am not worried about Global Warming, nor should any of you.
The Lower 48 two-week forecast cooled by 11.9 °F, with most of the changes occurring in the Northeast and Midwest region
The Northeast forecast shifted 27.9 °F cooler, and the Midwest forecast cooled by 15.7 °F, both over the two-week period

The EIA will release its weekly natural gas storage report today
The median estimate is for an injection of 107-Bcf, while the Bloomberg survey ranges from a low of 99-Bcf to a high of 110-Bcf

Commonwealth LNG expects its first export permit this summer (Reuters)
A permit to export gas to non-free Trade Agreement countries will be the first step toward the project reaching a final investment decision, which it expects by the end of the year
Commonwealth LNG will be constructed in Louisiana on the Calcasieu Ship Channel and have a capacity of 1.25-Bcf/d
The company did, however, say that regulatory conditions for LNG facilities have tightened, and they do not expect a third wave of LNG projects later this decade

Kinder Morgan to expand Texas gas storage facility (Reuters)
The pipeline operator will be expanding its Markham storage facility in Matagorda County, south of Houston by a total of 6-Bcf, bringing its total capacity to 28-Bcf
The company said the decision was made in part due to winter storm Uri in 2021, and that their storage portfolio is critical in supplying customers and power plants, especially during extreme weather events
It should be noted that the U.S. does need more natural gas in storage since demand for U.S. natural gas grows each year, we depend more and more on ngas for power generation and the world depends more and more each year on LNG exports from the U.S. to Asia and Europe.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - June 1

Post by dan_s »

Trading Economics
"WTI crude oil futures rebounded past $70 per barrel on Thursday after touching a two-month low of $68 in the previous session, supported by a weaker dollar and market relief as the US is set to suspend its debt ceiling until 2025. Markets also braced for potential price-supportive measures by the OPEC+ following the cartel’s meeting this weekend. Still, signs of weak demand and evidence of stronger supply limited the recovery. The pessimistic economic outlook from China continued to weigh on commodity prices after the world’s second-largest oil consumer posted mixed PMI figures for May. In the meantime, fresh data from the EIA showed that crude oil stocks rose by 4.5 million barrels on the week ending May 26th, surprising market forecasts of a 1.4 million draw and in line with the unexpected build-up posted by the API."

Did any of you really believe that we would not raise the debt ceiling?

The build in crude oil inventories was caused by timing of imports. During the hurricane season, weather in the Gulf of Mexico can cause big moves up and down in crude oil inventories. Gasoline inventories are low for this time of year and diesel inventories are DANGEROUSLY LOW (18% BELOW NORMAL). This country runs on diesel.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - June 1

Post by dan_s »

Closing Prices:
> Prompt-Month WTI (Jul 23) was up $2.01 on the day, to settle at $70.10
> Prompt-Month Henry Hub (Jul 23) was down $-0.108 on the day, to settle at $2.158

Oil price dips caused by FEAR seldom last. IMO the FEAR that the U.S. would default on the country's debt was way overblown. IMO Fear of a recession is also overblown, but as long as it is "Click Bait" the media will keep using the "R" word. Fear that the Chinese economy may not be growing as fast as we'd like may be a real concern, but data from China is never easy to confirm.

Note that EIA reported a build in U.S. crude oil inventories, but it was all due to a surge in oil imports. IMO transferring oil from a tanker to tanks on shore is not a "build" in inventories.
Dan Steffens
Energy Prospectus Group
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