Oil & Gas Prices - Nov 7

[dan_s]

Opening Prices:
> WTI is down $1.28 to $79.54/bbl, and Brent is down $1.41 to $83.77/bbl.
> Natural gas is down -11.4c to $3.15/MMBtu.

AEGIS Notes
Oil

Oil trades below $80 for the first time since August amid weak demand data from China
Chinese refiners have reduced output due to weak refining margins
The call skew recently seen in the oil market has faded, with put options now more expensive relative to calls

OPEC remains bullish on oil demand growth ahead of meeting (BBG)
Despite weak economic data, OPEC continues to hold a positive view on global oil demand
The OPEC Secretary General said, “The economy, despite the challenges, is still doing quite well,” and “All I can say for now is that we continue to monitor supply and demand fundamentals on a daily basis”
The next OPEC+ meeting will determine if Saudi Arabia and Russia will continue their voluntary supply cuts into 2024

A record number of supertankers is inbound to the US (BBG)
48 vessels will arrive in the US in the next three months, the most in at least six years, according to ship tracking data from Bloomberg
US light crude exports have surged this year as US refiners have preferred heavier grades, which yield more diesel
Energy Aspects said, “US slate-optimization is forcing further volumes of US light sweets to the waterborne market”

Natural Gas

Natural gas prices fall further to $3.15/MMBtu after yesterday’s 25c decline
The Winter ‘23/’24 strip is down 11.2c to $3.307, and the Summer ’24 strip is down by 6.5c to $3.289

Amid bearish weather forecasts and a new all-time high production, prompt month Henry hub finished 25.1c or 7% lower on Monday
However, production plunged by 2.2 Bcf/d today, with drops seen across TETCO, Rover, TCO, and Transco, including an expected decline at TETCO due to a System Wide OFO (Criterion)
Furthermore, warmer forecast across all regions led to a +6.1-degree rise in the 6-10 day forecast, with potential for cooler temperatures in the 11-15 day period

Sempra on track for 2024 FID on LNG expansions (S&P)
During a Nov. 3 earnings call, Sempra maintained a 2024 final investment decision target for the Port Arthur LNG project, which is set to double the terminal's capacity to 13.5 Mtpa
The company is also targeting a 2024 FID for the Cameron LNG expansion in Louisiana, which would increase capacity by 6.75 Mtpa
Both projects gain commercial traction, with Port Arthur securing a preliminary supply deal and Cameron focusing on reducing construction risks, added Sempra CEO Justin Bird

Williams expands gas gathering with Haynesville and Appalachian projects (Criterion)
In addition to its Transco expansions, Williams is set to increase its Appalachian gathering capacity, with Susquehanna increasing by over 320 Mmcf/d and Utica Cardinal by 125 Mmcf/d in 4Q 2023
In the Gulf Coast, Williams' Haynesville developments advance with the South Mansfield system adding 300 Mmcf/d in 3Q23 and an additional 550 Mmcf/d expected from Mansfield and Haynesville West
Additionally, the Louisiana Energy Gateway (LEG) is on track for a Q4 2024 start, allowing for 1.8 Bcf/d of new delivery capacity, expandable to 2.1 Bcf/d or more, into the Transco pipeline system

[dan_s]

Closing Prices;
> Prompt-Month WTI (Dec 23) was down $-3.45 on the day, to settle at $77.37
> Prompt-Month Henry Hub (Dec 23) was down $-0.124 on the day, to settle at $3.140

I talked to one of our "political connected" members in New York this afternoon. He thinks there is a lot of political pressure being put on to keep a lid on oil prices. Team Biden knows that high gasoline prices are bad for them.
This "noise" can only be temporary if demand for oil-based products exceeds supply. OPEC controls the oil price, not Washington DC.
Something weird is going on at EIA.