Oil & Gas Prices - Aug 10
Posted: Thu Aug 10, 2023 9:04 am
Opening Prices:
> WTI is down $0.70 to $83.70/bbl, and Brent is down $0.52 to $87.03/bbl.
> Natural gas is down -7.4c to $2.885/MMBtu.
AEGIS NOTES
OIL
Oil edges lower from nine-month highs following US inflation data
September ’23 WTI lost 70c this morning to trade around $83.70/Bbl
US CPI rose at an annualized rate of 3.2% in July, meeting expectations. The core CPI, which excludes food and energy, rose by 4.7% in July, slightly cooling from June’s 4.8% increase
Equities traded lower, and the dollar weakened following the CPI report
OPEC, in its August monthly report, maintained its 2023 YOY demand forecast at 2.4 MMBbl/d above 2022 levels, as well as its 2024 forecast for another rise of 2.2 MMBbl/d < We will need every barrel of OPEC+ spare capacity in 2024 to meet these demand increases.
However, the cartel’s July production was down by 0.84 MMBbl/d following the bloc’s voluntary output cuts
Additionally, Brent and WTI’s prompt spread leaped into a larger backwardation on Wednesday, a structure that indicates a more scarce supply. The prompt spreads rallied to their strongest since November amid concerns over the impact of prolonged heat on oil field operations in the US shale patch
Oil tanker rates plunge amid global supply cuts (Bloomberg)
Reductions in oil supply by major producers, including Saudi Arabia and Russia, have decreased the demand for tankers, leading to lower crude shipping rates for vessels from mid-sized Aframaxes to supertankers
Aframax tankers, which can typically hold about 0.7 MMBbl/d, saw their daily rates plunge from over $30,000 to $5905 last month, the lowest since June 2022, according to Baltic exchange
Russia's export cuts and supply disruptions in Iraq, Nigeria, and Kazakhstan further pressure shipping rates downward
NATURAL GAS
Natural gas prices are down 2.3% today after rallying above $3.00 yesterday
Weather forecasts have moderated some, with the Midwest and Rockies regional forecasts both cooling by about 11 °F over the two-week period
Pipeline exports to Mexico have been running well above prior-year levels, currently at 6.87 Bcf/d
The EIA will release its weekly natural gas storage report today
The median analyst expectation is for an injection of 23 Bcf, according to the Bloomberg survey
The five-year average injection for this week is 38 Bcf
Australian worker's strike could cut global LNG supply by 10% (BBG)
Workers at several LNG export facilities in Australia have voted to approve industrial action and could begin striking as soon as next week
In 2022, Australia was responsible for 21% of global LNG exports, making it the largest LNG exporter ahead of Qatar and the US
News of the potential strike sent European gas prices higher, with the prompt month Dutch TTF contract rising from $9.92/MMBtu to $12.72/MMBtu
Power sector warns against new emissions proposal (Reuters)
Utility trade group, Edison Electric Institute, has asked the EPA to revise a new power plant emissions proposal, which would require plants to institute carbon capture and hydrogen blending
PJM raised concerns over the proposal, saying that "needed technologies are not widely commercialized in time to balance out large amounts of retirements"
Several observers believe the rule if implemented, would force the early retirement of several coal plants
> WTI is down $0.70 to $83.70/bbl, and Brent is down $0.52 to $87.03/bbl.
> Natural gas is down -7.4c to $2.885/MMBtu.
AEGIS NOTES
OIL
Oil edges lower from nine-month highs following US inflation data
September ’23 WTI lost 70c this morning to trade around $83.70/Bbl
US CPI rose at an annualized rate of 3.2% in July, meeting expectations. The core CPI, which excludes food and energy, rose by 4.7% in July, slightly cooling from June’s 4.8% increase
Equities traded lower, and the dollar weakened following the CPI report
OPEC, in its August monthly report, maintained its 2023 YOY demand forecast at 2.4 MMBbl/d above 2022 levels, as well as its 2024 forecast for another rise of 2.2 MMBbl/d < We will need every barrel of OPEC+ spare capacity in 2024 to meet these demand increases.
However, the cartel’s July production was down by 0.84 MMBbl/d following the bloc’s voluntary output cuts
Additionally, Brent and WTI’s prompt spread leaped into a larger backwardation on Wednesday, a structure that indicates a more scarce supply. The prompt spreads rallied to their strongest since November amid concerns over the impact of prolonged heat on oil field operations in the US shale patch
Oil tanker rates plunge amid global supply cuts (Bloomberg)
Reductions in oil supply by major producers, including Saudi Arabia and Russia, have decreased the demand for tankers, leading to lower crude shipping rates for vessels from mid-sized Aframaxes to supertankers
Aframax tankers, which can typically hold about 0.7 MMBbl/d, saw their daily rates plunge from over $30,000 to $5905 last month, the lowest since June 2022, according to Baltic exchange
Russia's export cuts and supply disruptions in Iraq, Nigeria, and Kazakhstan further pressure shipping rates downward
NATURAL GAS
Natural gas prices are down 2.3% today after rallying above $3.00 yesterday
Weather forecasts have moderated some, with the Midwest and Rockies regional forecasts both cooling by about 11 °F over the two-week period
Pipeline exports to Mexico have been running well above prior-year levels, currently at 6.87 Bcf/d
The EIA will release its weekly natural gas storage report today
The median analyst expectation is for an injection of 23 Bcf, according to the Bloomberg survey
The five-year average injection for this week is 38 Bcf
Australian worker's strike could cut global LNG supply by 10% (BBG)
Workers at several LNG export facilities in Australia have voted to approve industrial action and could begin striking as soon as next week
In 2022, Australia was responsible for 21% of global LNG exports, making it the largest LNG exporter ahead of Qatar and the US
News of the potential strike sent European gas prices higher, with the prompt month Dutch TTF contract rising from $9.92/MMBtu to $12.72/MMBtu
Power sector warns against new emissions proposal (Reuters)
Utility trade group, Edison Electric Institute, has asked the EPA to revise a new power plant emissions proposal, which would require plants to institute carbon capture and hydrogen blending
PJM raised concerns over the proposal, saying that "needed technologies are not widely commercialized in time to balance out large amounts of retirements"
Several observers believe the rule if implemented, would force the early retirement of several coal plants