Oil & Gas Prices - July 28
Posted: Fri Jul 28, 2023 9:35 am
Opening Prices:
> WTI is up $0.02 to $80.11/bbl, and Brent is down $0.08 to $84.16/bbl.
> Natural gas is up 6.1c to $2.656/MMBtu.
AEGIS Notes
Oil
Oil heads for a fifth consecutive weekly gain as the supply tightens
> September ’23 WTI gains 2c this morning to trade around $80/Bbl
> Oil saw a five-week rally driven by signs of tighter supplies by Saudi and Russian output cuts
> US economic growth exceeded expectations, and there's speculation that the Fed is near or at the end of its tightening cycle
> Meanwhile, China commits to additional stimulus measures to bolster growth in the world's largest crude importer
Inventories at Cushing, OK, fell by 7.5 MMBbl/d in the past four weeks, pushing the stocks to their lowest since May, supporting the widening backwardation of WTI
Russia intends to meet oil export cut pledge in August, says Energy Minister Shulginov (Bloomberg)
> Russia cut oil exports in July to fulfill the OPEC+ pledge, and intends to do so again in August, reports Tass, quoting Energy Minister Nikolai Shulginov
> Deputy Prime Minister Novak, earlier this month, had announced a reduction of 0.5 MMBbbl/d in August to stabilize the global market
> In line with the pledge, Russian crude exports dropped to 2.73 MMBbl/d in the week leading up to July 23, largely driven by a decline in exports from Western ports on the Baltic and Black Seas
> This figure is 1.48 MMBbl/d lower than the peak exports recorded in the final week of April, as per Bloomberg’s ship tracking
US Retail gasoline prices surge to eight-month high amid low inventories and refinery shutdown
> US retail gasoline prices have soared to an eight-month high, hitting $3.714/Gal on Thursday – an increase of 13.4c from the last week, according to AAA
> The EIA reported a 0.8 MMBbl/d drop in gasoline inventories last week, its lowest seasonal level since 2015
> An estimated four-week repair closure of Exxon Mobil's Baton Rouge refinery unit (0.25 MMBbl/d) further fueled the price rally
Natural Gas
Natural gas prices are trading higher, with the September contract now the prompt-month
> The Lower 48 two-week weather forecast cooled slightly today, with temperatures expected to stay around the 10-year average for the entirety of the period after being significantly elevated this week and last week
> Natural gas has held a smaller share of the thermal power mix (gas + coal) in the past week, at 69-70%, compared to 75% earlier this summer
Supreme Court overturns Mountain Valley Pipeline halt (BBG)
> The work stay issued by the US Fourth Circuit Court of Appeals has been lifted, which should enable MVP to resume construction on the 2 Bcf/d Appalachian pipeline
> The Supreme Court did not provide any additional details on its decision
> If developers are able to bring the pipeline into service in 2023, it should boost egress capacity out of the Northeast and increase supply into the > Transcontinental Pipeline system by 200-400 MMcf/d
> However, EQT recently stated in their Q2 earnings that they are planning multiple expansions to compressor station 165, where MVP will connect to the Transcontinental pipeline
Power prices spike across the US due to soaring temperatures (Reuters)
> Day-ahead power prices in the PJM system rose to the highest level since February, while prices in Arizona reached the highest level since December 2022
> PJM and CAISO both issued alerts this week and told utilities to defer power plant maintenance until the alert is over
> Lower 48 power sector gas demand is currently at a year-to-date high of 49.7 Bcf/d
> WTI is up $0.02 to $80.11/bbl, and Brent is down $0.08 to $84.16/bbl.
> Natural gas is up 6.1c to $2.656/MMBtu.
AEGIS Notes
Oil
Oil heads for a fifth consecutive weekly gain as the supply tightens
> September ’23 WTI gains 2c this morning to trade around $80/Bbl
> Oil saw a five-week rally driven by signs of tighter supplies by Saudi and Russian output cuts
> US economic growth exceeded expectations, and there's speculation that the Fed is near or at the end of its tightening cycle
> Meanwhile, China commits to additional stimulus measures to bolster growth in the world's largest crude importer
Inventories at Cushing, OK, fell by 7.5 MMBbl/d in the past four weeks, pushing the stocks to their lowest since May, supporting the widening backwardation of WTI
Russia intends to meet oil export cut pledge in August, says Energy Minister Shulginov (Bloomberg)
> Russia cut oil exports in July to fulfill the OPEC+ pledge, and intends to do so again in August, reports Tass, quoting Energy Minister Nikolai Shulginov
> Deputy Prime Minister Novak, earlier this month, had announced a reduction of 0.5 MMBbbl/d in August to stabilize the global market
> In line with the pledge, Russian crude exports dropped to 2.73 MMBbl/d in the week leading up to July 23, largely driven by a decline in exports from Western ports on the Baltic and Black Seas
> This figure is 1.48 MMBbl/d lower than the peak exports recorded in the final week of April, as per Bloomberg’s ship tracking
US Retail gasoline prices surge to eight-month high amid low inventories and refinery shutdown
> US retail gasoline prices have soared to an eight-month high, hitting $3.714/Gal on Thursday – an increase of 13.4c from the last week, according to AAA
> The EIA reported a 0.8 MMBbl/d drop in gasoline inventories last week, its lowest seasonal level since 2015
> An estimated four-week repair closure of Exxon Mobil's Baton Rouge refinery unit (0.25 MMBbl/d) further fueled the price rally
Natural Gas
Natural gas prices are trading higher, with the September contract now the prompt-month
> The Lower 48 two-week weather forecast cooled slightly today, with temperatures expected to stay around the 10-year average for the entirety of the period after being significantly elevated this week and last week
> Natural gas has held a smaller share of the thermal power mix (gas + coal) in the past week, at 69-70%, compared to 75% earlier this summer
Supreme Court overturns Mountain Valley Pipeline halt (BBG)
> The work stay issued by the US Fourth Circuit Court of Appeals has been lifted, which should enable MVP to resume construction on the 2 Bcf/d Appalachian pipeline
> The Supreme Court did not provide any additional details on its decision
> If developers are able to bring the pipeline into service in 2023, it should boost egress capacity out of the Northeast and increase supply into the > Transcontinental Pipeline system by 200-400 MMcf/d
> However, EQT recently stated in their Q2 earnings that they are planning multiple expansions to compressor station 165, where MVP will connect to the Transcontinental pipeline
Power prices spike across the US due to soaring temperatures (Reuters)
> Day-ahead power prices in the PJM system rose to the highest level since February, while prices in Arizona reached the highest level since December 2022
> PJM and CAISO both issued alerts this week and told utilities to defer power plant maintenance until the alert is over
> Lower 48 power sector gas demand is currently at a year-to-date high of 49.7 Bcf/d