Oil & Gas Prices - Nov 16
Posted: Thu Nov 16, 2023 10:44 am
Opening Prices
WTI is down $0.63 to $76.03/bbl, and Brent is down $0.64 to $80.54/bbl.
Natural gas is up 0.7c to $3.197/MMBtu. (As of 08:01 AM CDT)
AEGIS Notes
Oil is trading lower, around $75, following weak economic data this morning
Initial jobless claims came in higher than expected, and industrial production was lower than anticipated
The Biden administration announced that the US will be enforcing sanctions against Iran, saying that their export numbers will come down after sanctions are enforced
OPEC+ could surprise with deeper supply cuts, says JPM (BBG)
JPMorgan’s head of energy strategy said that while it is not the most likely outcome, the market is discounting the chance of deeper oil supply reductions
He added further, “The market’s probably assuming very little chance of that happening; I’d say it's much higher than that – not as a base case but as a scenario”
OPEC+ will be meeting on November 26 to determine the future of their output cuts
US crude inventories at the highest level since August (BBG)
Inventories rose for the fourth consecutive week, reaching the highest level since August, with the Cushing build being the largest since January
Higher inventories could weigh on the WTI prompt spread, which is already in contango, as the prompt month contract trades at a discount to future months
The EIA released its new methodology for crude oil supply, which aims to address millions of missing barrels in previous reports, recognizing that natural gasoline and unfinished oil used in crude blending belong to crude supply
Natural Gas
Natural gas trades higher around $3.197 amid cold late-November forecasts
The Winter ‘23/’24 strip is down 0.3c to $3.208, and the Summer ’24 strip is down by 1.6c to $3.205
The weather model forecasts continued cold in the Northeast/Midwest, intense cold snap for Thanksgiving in the West/Rockies, and below-average temps through November's end
Production remains around 103.3 Bcf/d after falling by -0.7 Bcf/d in the evening cycle, mainly in the South Central region, particularly El Paso, Tiger, and NGPL, but late-cycle gains have been averaging above 0.4 Bcf/d for the last two days (Criterion)
Appalachian gas production surges amid colder weather and expansions (Platts)
Recent colder weather in the US Northeast has provided producers an opportunity to increase production, indicating the possibility of a record-setting winter for gas production
On Tuesday, Northeast ResComm gas demand peaked at 12.4 Bcf/d, the highest since March, and heating demand rose by nearly 5 Bcf/d in the past week to an average of 10.8 Bcf/d, while total production hit a new record of 37.6 Bcf/d
The expansion of transport capacity from the Marcellus to the Northeast could enable Appalachian gas production to reach new highs, potentially reaching 37-38 Bcf/d this winter
On Oct. 20, the FERC approved Transcontinental Gas Pipe Line to add 450 MMcf/d of pipeline capacity on its Regional Energy Access Expansion project to increase supply from Pennsylvania to the Northeast
Williams aims to complete full service by the end of the 2023-2024 heating season
WTI is down $0.63 to $76.03/bbl, and Brent is down $0.64 to $80.54/bbl.
Natural gas is up 0.7c to $3.197/MMBtu. (As of 08:01 AM CDT)
AEGIS Notes
Oil is trading lower, around $75, following weak economic data this morning
Initial jobless claims came in higher than expected, and industrial production was lower than anticipated
The Biden administration announced that the US will be enforcing sanctions against Iran, saying that their export numbers will come down after sanctions are enforced
OPEC+ could surprise with deeper supply cuts, says JPM (BBG)
JPMorgan’s head of energy strategy said that while it is not the most likely outcome, the market is discounting the chance of deeper oil supply reductions
He added further, “The market’s probably assuming very little chance of that happening; I’d say it's much higher than that – not as a base case but as a scenario”
OPEC+ will be meeting on November 26 to determine the future of their output cuts
US crude inventories at the highest level since August (BBG)
Inventories rose for the fourth consecutive week, reaching the highest level since August, with the Cushing build being the largest since January
Higher inventories could weigh on the WTI prompt spread, which is already in contango, as the prompt month contract trades at a discount to future months
The EIA released its new methodology for crude oil supply, which aims to address millions of missing barrels in previous reports, recognizing that natural gasoline and unfinished oil used in crude blending belong to crude supply
Natural Gas
Natural gas trades higher around $3.197 amid cold late-November forecasts
The Winter ‘23/’24 strip is down 0.3c to $3.208, and the Summer ’24 strip is down by 1.6c to $3.205
The weather model forecasts continued cold in the Northeast/Midwest, intense cold snap for Thanksgiving in the West/Rockies, and below-average temps through November's end
Production remains around 103.3 Bcf/d after falling by -0.7 Bcf/d in the evening cycle, mainly in the South Central region, particularly El Paso, Tiger, and NGPL, but late-cycle gains have been averaging above 0.4 Bcf/d for the last two days (Criterion)
Appalachian gas production surges amid colder weather and expansions (Platts)
Recent colder weather in the US Northeast has provided producers an opportunity to increase production, indicating the possibility of a record-setting winter for gas production
On Tuesday, Northeast ResComm gas demand peaked at 12.4 Bcf/d, the highest since March, and heating demand rose by nearly 5 Bcf/d in the past week to an average of 10.8 Bcf/d, while total production hit a new record of 37.6 Bcf/d
The expansion of transport capacity from the Marcellus to the Northeast could enable Appalachian gas production to reach new highs, potentially reaching 37-38 Bcf/d this winter
On Oct. 20, the FERC approved Transcontinental Gas Pipe Line to add 450 MMcf/d of pipeline capacity on its Regional Energy Access Expansion project to increase supply from Pennsylvania to the Northeast
Williams aims to complete full service by the end of the 2023-2024 heating season