Oil & Gas Prices - Aug 7
Posted: Mon Aug 07, 2023 9:33 am
Opening Prices:
> WTI is down $0.67 to $82.15/bbl, and Brent is down $0.66 to $85.58/bbl.
> Natural gas is up 7.1c to $2.648/MMBtu.
AEGIS Notes
Oil
Oil retreats from April peak as market weighs tight supply with further rate hikes
September ’23 WTI lost 73c this morning to trade around $82.09/Bbl
Equities trade lower, while the dollar weakened relative to its recent highs
Government bond selloffs intensified Monday due to concerns over potential interest rate hikes. The 30-year German bond yield hit its highest since early 2014, and similar US yields also rose
While exports are continuing, Ukrainian drone attacks near Russia’s Black Sea ports highlight the threat to crude and product exports
Additionally, Poland halted oil shipments to Germany via the Druzhba pipeline after finding a leak Saturday. Flows should resume Tuesday
Black Sea drone strikes threaten Russian crude exports (Bloomberg)
Ukrainian drone attacks on a Russian naval vessel and an oil tanker in the Black Sea over the weekend endangered Russia's commodity exports, including 15-20% of its daily global oil sales
Russia's Novorossiysk port, a major oil export hub, faces potential disruptions affecting up to 2.5 MMBbl/d of crude and product exports
Kpler expects that freight rates across the Black Sea could "balloon," with the cost of shipping Russian crude potentially increasing by as much as 50% due to the escalated risk
Saudi oil prices to Asia indicate uneven recovery across crude markets (Bloomberg)
Saudi Arabia's oil pricing shows higher-density crudes outperforming lighter grades; heavier crudes for Asian clients in September rise by up to 70c, almost double the increase for Arab Light crude (+30c)
Price rises in heavier oil blends may be due to tighter global supply from Saudi cuts and reduced Russian exports, along with improved Asian refining margins favoring diesel and fuel oil
Arab Extra Light crude's price remains unchanged, possibly due to increased U.S. exports to Asia
According to traders, lighter crudes remain well-supplied, particularly in the Atlantic Basin
Natural Gas
Natural gas prices are trading higher by 6.7c to $2.65 after hotter weather is forecast for the South Central region
Regional weather forecasts were mixed. With the Northeast region’s forecast cooling by 7.9 °F. the Midwest warming by 10.1 °F, and the South Central warming by 17.8 °F cumulatively over the two-week period
Lower 48 gas production has rebounded, reaching 101.5 Bcf/d this weekend and 100.5 Bcf/d today
Throughput from the Midwest to the South Central is at a two-year high as more Appalachian supply has gone south
California regulators propose increasing Aliso Canyon storage capacity (S&P)]
State regulators have released a proposed decision to increase capacity at the Aliso Canyon gas storage facility from 41.16 Bcf to 68.6 Bcf
SoCal Gas and SDG&E have petitioned for the capacity increase, saying that it would decrease the chance of price spikes
The proposal is intended to increase preparedness for winter; however, the capacity increase may come too late to impact the Winter ‘23/’24 season
> WTI is down $0.67 to $82.15/bbl, and Brent is down $0.66 to $85.58/bbl.
> Natural gas is up 7.1c to $2.648/MMBtu.
AEGIS Notes
Oil
Oil retreats from April peak as market weighs tight supply with further rate hikes
September ’23 WTI lost 73c this morning to trade around $82.09/Bbl
Equities trade lower, while the dollar weakened relative to its recent highs
Government bond selloffs intensified Monday due to concerns over potential interest rate hikes. The 30-year German bond yield hit its highest since early 2014, and similar US yields also rose
While exports are continuing, Ukrainian drone attacks near Russia’s Black Sea ports highlight the threat to crude and product exports
Additionally, Poland halted oil shipments to Germany via the Druzhba pipeline after finding a leak Saturday. Flows should resume Tuesday
Black Sea drone strikes threaten Russian crude exports (Bloomberg)
Ukrainian drone attacks on a Russian naval vessel and an oil tanker in the Black Sea over the weekend endangered Russia's commodity exports, including 15-20% of its daily global oil sales
Russia's Novorossiysk port, a major oil export hub, faces potential disruptions affecting up to 2.5 MMBbl/d of crude and product exports
Kpler expects that freight rates across the Black Sea could "balloon," with the cost of shipping Russian crude potentially increasing by as much as 50% due to the escalated risk
Saudi oil prices to Asia indicate uneven recovery across crude markets (Bloomberg)
Saudi Arabia's oil pricing shows higher-density crudes outperforming lighter grades; heavier crudes for Asian clients in September rise by up to 70c, almost double the increase for Arab Light crude (+30c)
Price rises in heavier oil blends may be due to tighter global supply from Saudi cuts and reduced Russian exports, along with improved Asian refining margins favoring diesel and fuel oil
Arab Extra Light crude's price remains unchanged, possibly due to increased U.S. exports to Asia
According to traders, lighter crudes remain well-supplied, particularly in the Atlantic Basin
Natural Gas
Natural gas prices are trading higher by 6.7c to $2.65 after hotter weather is forecast for the South Central region
Regional weather forecasts were mixed. With the Northeast region’s forecast cooling by 7.9 °F. the Midwest warming by 10.1 °F, and the South Central warming by 17.8 °F cumulatively over the two-week period
Lower 48 gas production has rebounded, reaching 101.5 Bcf/d this weekend and 100.5 Bcf/d today
Throughput from the Midwest to the South Central is at a two-year high as more Appalachian supply has gone south
California regulators propose increasing Aliso Canyon storage capacity (S&P)]
State regulators have released a proposed decision to increase capacity at the Aliso Canyon gas storage facility from 41.16 Bcf to 68.6 Bcf
SoCal Gas and SDG&E have petitioned for the capacity increase, saying that it would decrease the chance of price spikes
The proposal is intended to increase preparedness for winter; however, the capacity increase may come too late to impact the Winter ‘23/’24 season