Oil & Gas Prices - Nov 6
Posted: Mon Nov 06, 2023 10:15 am
Opening Prices:
> WTI is up $0.89 to $81.40/bbl, and Brent is up $0.77 to $85.66/bbl.
> Natural gas is down -18.5c to $3.33/MMBtu.
AEGIS Notes
Oil
Oil prices firmed Monday morning as both Saudi Arabia and Russia reaffirmed that they will stick with oil supply cuts of more than 1 MMbl/d until year-end
The continuation of the cuts comes amid turmoil in the Middle East
The Saudis also left their December official selling price (OSP) for two of five oil grades unchanged to Asian customers (BBG)
Saudi and Russia stuck to plan to continue oil cuts (BBG)
The leaders of OPEC+ separately announced plans to keep cuts through the end of the year
The Kingdom has been cutting crude production by 1 MMBbl/d, and Moscow is curbing exports by 300 MBbl/d
These cuts are on top of cuts made with other OPEC+ nations
This is why I believe WTI will average $90 in 2024: The Saudis may need oil prices as high as $100, according to Bloomberg Economics, to fund expensive projects such as the futuristic city known as Neom
“We believe these voluntary supply cuts are likely to be extended into the first quarter of 2024 – given seasonally weaker oil demand at the start of every year, ongoing economic growth concerns, and the aim of producers and OPEC+ to support the oil market’s stability and balance,” said Giovani Staunovo, a commodity analyst at UBS Group AG < See more comments from UBS in my previous post.
Natural Gas
Natural gas prices fell by over 18c, reversing some of last week's gains due to a warmer weather outlook
The Winter ‘23/’24 strip is down 12.9c this morning at $3.458, and the Summer ’24 strip is down 7.9c at $3.349
Last week's rally of over 30c was driven by colder forecasts. However, the beginning of November is now expected to be warmer than the 10-year average
Bullish News: Cheniere’s Corpus Christi LNG project is now expected to start early by the end of 2024
Williams ramps up midstream expansions amid growing global natural gas demand (NGI)
Despite low prices in 2023, Williams is expanding its midstream infrastructure to meet rising global demand for U.S. natural gas
Williams completed phase one of the Transco’s Regional Energy Access project, increasing pipeline capacity in Northeastern Pennsylvania ahead of schedule with full completion aimed for late 2024 to add 830 MMcf/d
The company signed agreements for the Southeast Supply Enhancement project to provide over 1.4 Bcf/d of takeaway capacity from Transco Station 165, with plans to proceed into permitting due to high demand, ensuring contracts through at least 2047
In the DJ Basin, Williams plans to acquire Cureton Front Range, including gas pipelines and two plants across 225,000 acres, aiming to close the deal by year-end < Good news for Civitas Resources (CIVI)
Additionally, CEO Alan Armstrong announced during the 3Q earnings call the planned purchase of KKR's half-stake in Rocky Mountain Midstream and a $1.27 billion expansion to improve midstream services, aiming for completion by year's end
> WTI is up $0.89 to $81.40/bbl, and Brent is up $0.77 to $85.66/bbl.
> Natural gas is down -18.5c to $3.33/MMBtu.
AEGIS Notes
Oil
Oil prices firmed Monday morning as both Saudi Arabia and Russia reaffirmed that they will stick with oil supply cuts of more than 1 MMbl/d until year-end
The continuation of the cuts comes amid turmoil in the Middle East
The Saudis also left their December official selling price (OSP) for two of five oil grades unchanged to Asian customers (BBG)
Saudi and Russia stuck to plan to continue oil cuts (BBG)
The leaders of OPEC+ separately announced plans to keep cuts through the end of the year
The Kingdom has been cutting crude production by 1 MMBbl/d, and Moscow is curbing exports by 300 MBbl/d
These cuts are on top of cuts made with other OPEC+ nations
This is why I believe WTI will average $90 in 2024: The Saudis may need oil prices as high as $100, according to Bloomberg Economics, to fund expensive projects such as the futuristic city known as Neom
“We believe these voluntary supply cuts are likely to be extended into the first quarter of 2024 – given seasonally weaker oil demand at the start of every year, ongoing economic growth concerns, and the aim of producers and OPEC+ to support the oil market’s stability and balance,” said Giovani Staunovo, a commodity analyst at UBS Group AG < See more comments from UBS in my previous post.
Natural Gas
Natural gas prices fell by over 18c, reversing some of last week's gains due to a warmer weather outlook
The Winter ‘23/’24 strip is down 12.9c this morning at $3.458, and the Summer ’24 strip is down 7.9c at $3.349
Last week's rally of over 30c was driven by colder forecasts. However, the beginning of November is now expected to be warmer than the 10-year average
Bullish News: Cheniere’s Corpus Christi LNG project is now expected to start early by the end of 2024
Williams ramps up midstream expansions amid growing global natural gas demand (NGI)
Despite low prices in 2023, Williams is expanding its midstream infrastructure to meet rising global demand for U.S. natural gas
Williams completed phase one of the Transco’s Regional Energy Access project, increasing pipeline capacity in Northeastern Pennsylvania ahead of schedule with full completion aimed for late 2024 to add 830 MMcf/d
The company signed agreements for the Southeast Supply Enhancement project to provide over 1.4 Bcf/d of takeaway capacity from Transco Station 165, with plans to proceed into permitting due to high demand, ensuring contracts through at least 2047
In the DJ Basin, Williams plans to acquire Cureton Front Range, including gas pipelines and two plants across 225,000 acres, aiming to close the deal by year-end < Good news for Civitas Resources (CIVI)
Additionally, CEO Alan Armstrong announced during the 3Q earnings call the planned purchase of KKR's half-stake in Rocky Mountain Midstream and a $1.27 billion expansion to improve midstream services, aiming for completion by year's end