Oil & Gas Prices - Sept 26
Posted: Tue Sep 26, 2023 9:11 am
Opening Prices:
> WTI is down $0.42 to $89.26/bbl, and Brent is down $0.47 to $92.82/bbl.
> Natural gas is down -6.6c to $2.573/MMBtu.
AEGIS Notes
Oil
Oil edges lower as economic outlook concerns counter supply tightness
Low-risk appetite across markets with investors pricing in a prolonged period of higher interest rates is weighing on crude prices
Meanwhile, the U.S. dollar hit a ten-month high on Tuesday as higher bond yields attracted investors toward the greenback making dollar-denominated commodities expensive
However, supply remains tight as Russia and Saudi Arabia have extended their voluntary 1.3 MMBbl/d production cuts to the end of the year
Regulator approves Trans Mountain Oil Pipeline route change (Bloomberg)
Canada regulator approved replacing the 1.3 km tunneled section of the Trans Mountain pipeline with an open trench to cut costs and delays
The expansion will triple oil pipeline capacity from 0.30 to 0.89 MMBbl/d from Alberta to the Pacific coast
The project has faced over a decade of delays since first announced and was purchased by the government in 2018 after costs had quadrupled; with the recent route change approval, it is now expected to be completed by early 2024
Oil could hit $150 without more exploration, Shale executive warns (Bloomberg) < Watch my podcast to learn why OECD petroleum inventories will keep falling to 22 Days of Consumptions and why "rationing by price" will be necessary. This is not a good thing from the global economy.
Continental Resources Chairman Harold Hamm warns oil could reach $150/Bbl without more US government support for drilling and exploration
Shale executives at the American Energy Security Summit called for the Biden administration to adopt consistent policies allowing more drilling, warning of tight supplies and higher prices < NEWS FLASH: Team Biden will not do a thing to help U.S. oil and gas companies.
However, the CEOs noted they don't intend to significantly boost output despite oil nearing $100/Bbl for the first time in over a year
Natural Gas
Natural gas prices are down 2.5% to a two-week low
The Winter ‘23/’24 strip is down 6c to $3.27, and Summer ’24 is down 5c to $3.16
Gas demand is expected to stay around 65-70 Bcf/d over the next two weeks
LNG feedgas levels have fallen to 11.14 Bcf/d, which is one of the lowest levels of the past three months
Construction on Tennessee Gas East 300 Upgrade ongoing despite legal troubles (S&P)
Tennessee Gas is continuing work on a new compressor station in New Jersey while it appeals a court decision that vacated the facility’s regulatory exemption
A spokesperson from Kinder Morgan said they "will continue to work with the NJDEP to address the ruling, as well as consider all other appropriate actions to ensure this federally approved project is placed in service on schedule, in advance of the winter heating season."
The East 300 upgrade would provide 115 MMcf/d of additional capacity to the Northeast Pipeline grid, which has some of the highest delivered gas prices in the country
The January 2024 Algonquin contract, which represents gas delivered to the Boston area, has traded as high as $16.19/MMbtu in the past week
Alaska utility resumes plan to construct pipeline (S&P)
Alaska’s largest utility is again looking to construct a 36-inch pipeline from Alaska’s North Slope to the Cook Inlet
This comes amid projections that the Cook Inlet will run short of needed gas supplies within this decade
Other potential options for securing new gas supplies include LNG imports, which would likely come from British Columbia
> WTI is down $0.42 to $89.26/bbl, and Brent is down $0.47 to $92.82/bbl.
> Natural gas is down -6.6c to $2.573/MMBtu.
AEGIS Notes
Oil
Oil edges lower as economic outlook concerns counter supply tightness
Low-risk appetite across markets with investors pricing in a prolonged period of higher interest rates is weighing on crude prices
Meanwhile, the U.S. dollar hit a ten-month high on Tuesday as higher bond yields attracted investors toward the greenback making dollar-denominated commodities expensive
However, supply remains tight as Russia and Saudi Arabia have extended their voluntary 1.3 MMBbl/d production cuts to the end of the year
Regulator approves Trans Mountain Oil Pipeline route change (Bloomberg)
Canada regulator approved replacing the 1.3 km tunneled section of the Trans Mountain pipeline with an open trench to cut costs and delays
The expansion will triple oil pipeline capacity from 0.30 to 0.89 MMBbl/d from Alberta to the Pacific coast
The project has faced over a decade of delays since first announced and was purchased by the government in 2018 after costs had quadrupled; with the recent route change approval, it is now expected to be completed by early 2024
Oil could hit $150 without more exploration, Shale executive warns (Bloomberg) < Watch my podcast to learn why OECD petroleum inventories will keep falling to 22 Days of Consumptions and why "rationing by price" will be necessary. This is not a good thing from the global economy.
Continental Resources Chairman Harold Hamm warns oil could reach $150/Bbl without more US government support for drilling and exploration
Shale executives at the American Energy Security Summit called for the Biden administration to adopt consistent policies allowing more drilling, warning of tight supplies and higher prices < NEWS FLASH: Team Biden will not do a thing to help U.S. oil and gas companies.
However, the CEOs noted they don't intend to significantly boost output despite oil nearing $100/Bbl for the first time in over a year
Natural Gas
Natural gas prices are down 2.5% to a two-week low
The Winter ‘23/’24 strip is down 6c to $3.27, and Summer ’24 is down 5c to $3.16
Gas demand is expected to stay around 65-70 Bcf/d over the next two weeks
LNG feedgas levels have fallen to 11.14 Bcf/d, which is one of the lowest levels of the past three months
Construction on Tennessee Gas East 300 Upgrade ongoing despite legal troubles (S&P)
Tennessee Gas is continuing work on a new compressor station in New Jersey while it appeals a court decision that vacated the facility’s regulatory exemption
A spokesperson from Kinder Morgan said they "will continue to work with the NJDEP to address the ruling, as well as consider all other appropriate actions to ensure this federally approved project is placed in service on schedule, in advance of the winter heating season."
The East 300 upgrade would provide 115 MMcf/d of additional capacity to the Northeast Pipeline grid, which has some of the highest delivered gas prices in the country
The January 2024 Algonquin contract, which represents gas delivered to the Boston area, has traded as high as $16.19/MMbtu in the past week
Alaska utility resumes plan to construct pipeline (S&P)
Alaska’s largest utility is again looking to construct a 36-inch pipeline from Alaska’s North Slope to the Cook Inlet
This comes amid projections that the Cook Inlet will run short of needed gas supplies within this decade
Other potential options for securing new gas supplies include LNG imports, which would likely come from British Columbia