Oil & Gas Prices - June 2

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

Oil & Gas Prices - June 2

Post by dan_s »

Opening Prices:
> WTI is up $1.71 to $71.81/bbl, and Brent is up $1.72 to $76.00/bbl.
> Natural gas is up 2.1c to $2.179/MMBtu.

AEGIS Notes
Oil

Oil heads for a weekly loss despite partial rebound following the U.S. debt deal
July ’23 WTI gained $1.71 this morning to trade around 72/Bbl
Equities trade higher while the U.S. dollar weakened relative to its recent highs

The U.S. Senate has passed legislation to suspend the debt ceiling and limit spending until 2024
Prices were also supported by US job growth beating expectations in May; the unemployment rate rises to 3.7% < MY TAKE: Unless we start seeing job losses, there is very little chance of the most advertised recession in history being much worse than a mild slowdown in the U.S. economy. Consumer spending is the primary driver of this nation's economic growth and as long as people have jobs, they keep spending.

The market awaits this weekend’s OPEC meeting, with expectations of unchanged output despite Saudi Arabia's energy minister warning speculators
OPEC's Voluntary Cuts Decrease May's Crude Output (Bloomberg)
OPEC's production dropped by 0.5 MMBbl/d to 28.26 MMBbl/d in May due to voluntary cuts, according to a Bloomberg survey
Despite major cuts from Saudi Arabia, a rebound in production in Angola, Nigeria, and Iraq offset the cuts partially
Crude prices briefly surged following OPEC's announced cuts in early April but concerns over global economic health soon dampened the rally

Natural Gas

Natural gas prices are higher, around $2.18, set to finish lower for the second week
The Winter ‘23/’24 strip is up 5c to $3.38, and the Summer ’24 strip is higher by 5c to $3.20 < The NYMEX strip natural gas prices of $2.31 for Q3 and $2.94 for Q4 are close to what I am using in my forecasts models: $2.25 for Q2, $2.50 for Q3 and $2.75 for Q4.

Lower 48 weather forecasts cooled by a total of 8.9 °F over the two-week period
Midwest region forecasts shifted cooler by 28.8 °F, and the South Central regions forecast cooled by 18.4 °F

LNG feedgas flows are lower due to maintenance at Sabine Pass LNG, which has brought two trains offline
Yesterday, the EIA reported a storage build of 110-Bcf, bringing the storage surplus to 349-Bcf above the five-year average < Keep in mind that U.S. natural gas storage capacity needs to increase with the overall demand for U.S. natural gas. Demand for U.S. natural gas is higher than it was five years ago and by 2028 U.S. export capacity (LNG and via pipeline) will double from 20 Bcfpd now to over 40 Bcfpd.

Dominion shuts down 2 GW of coal and oil generating capacity in Virginia (S&P)
The company has shut down a 1,032-MW coal plant and a 792-MW oil-fired unit as part of a push to phase out higher-emission sources of electricity
Two natural gas-fired units will remain open at the facility, with Dominion saying that the units play an important role in grid reliability
The continued retirement of coal capacity across the US has led to the power sector relying much more heavily on natural gas to shore up generation shortfalls
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: Oil & Gas Prices - June 2

Post by dan_s »

Closing Prices:
> Prompt-Month WTI (Jul 23) was up $1.64 on the day, to settle at $71.74
> Prompt-Month Henry Hub (Jul 23) was up $0.014 on the day, to settle at $2.172

Keep in mind that "Fear Based" oil price declines seldom last.
By the end of this summer, demand for oil-based products will exceed supply. < IEA has been telling the world this for months.
We can't keep draining the SPR.
Dan Steffens
Energy Prospectus Group
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