Oil & Gas Prices - Sept 27

[dan_s]

Opening Prices:
> WTI is up $1.84 to $92.23/bbl, and Brent is up $1.51 to $95.47/bbl.
> Natural gas is up 4.0c to $2.696/MMBtu. (As of 08:01 AM CDT)

AEGIS Notes
Oil

Oil soars to a new ten-month high, driven by a tightening market

Despite the dollar’s rally to the highest since November 2022, crude prices continue to trade at year-to-date highs as supply tightens < IMO it is SIGNIFICANT that WTI is moving higher even with the stronger U.S. dollar.

The market continues to monitor the health of the US economy and potential rate hikes following the Fed's recent hawkish stance

Concerns persist over U.S. crude inventories at the key Cushing, Oklahoma hub nearing the minimum operating level
Inventories at Cushing have fallen from a two-year high of 43.2 MMBbl in June to less than 22.9 MMBbl last week

Amid Russia ban, New York surprises as a pivotal diesel supplier (Bloomberg)
Over the past week, New York exported three cargoes totaling 1 MMBbl of diesel/gasoil as Russia’s fuel export ban sends buyers searching for new supplies
Exports from NY Harbor averaged 41,000 Bbl/d so far in September, marking the highest monthly rate since June 2020
Historically a net diesel importer, New York has transitioned to a net exporter since July, causing regional distillate inventories to hit record lows for the season

Natural Gas

Natural gas prices are trading higher ahead of the October contract expiry
The November NYMEX Henry Hub contract will become the prompt month contract beginning tomorrow < The NOV23 HH contract trading at $2.91 this morning. If we keep getting bullish storage reports through October, NOV23 should close over $3.00 before it expires.

Temperatures are currently forecast to stay between 68 °F and 70 °F over the next two days, keeping gas demand limited to about 67 Bcf/d

Shippers press FERC for vote on GTN expansion (S&P)
The GTN Express project would increase capacity between Idaho and Oregon by 150 MMcf/d by upgrading existing compressor sites
The project is planned to enter service on November 1, ahead of the Winter ‘23/’24 season, but still requires authorization from FERC
Intermountain Gas and Cascade Natural Gas said, “The commission’s continued inaction has almost certainly exposed [distributors] to costlier supply sources to meet their load demands this winter season,”

Cheniere reduces feedgas at two LNG facilities (Reuters)
The company reduced its gas intake at its Sabine Pass and Corpus Christi facilities by a combined total of about 1 Bcf/d
The reduction brought total US LNG feedgas demand to a four-week low of 11.2 Bcf/d
Cheniere declined to comment on the drop

[dan_s]

Closing Prices
> Prompt-Month WTI (Nov 23) was up $3.29 on the day, to settle at $93.68
> Prompt-Month Henry Hub (Oct 23) was up $0.108 on the day, to settle at $2.764 < NOV23 is testing $3.00

Last Look - Oil soars to highest since August 2022, driven by a tightening market

The Big Paradigm Shift has moved into the next phase.