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Oil & Gas Market Update - August 20
Oil & Gas Market Update - August 20
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Market Update - August 20
From John White at Roth Capital:
WTI crude oil was up nearly 9% last week, in our opinion due to the continued reporting of OPEC
members potentially meeting to discuss a freeze of production, even though consensus opinion
seems to be that there is little expectation the cartel will act.
The weekly EIA report on U.S. oil production reported total U.S. production increased by
approximately 152,000 b/d week over week, but the EIA highlighted this increase was due to a
“re-benchmarking” of the weekly production data series to the more accurate monthly production
data. Nonetheless, this re-benchmarked weekly production for early August of 8.6 million b/d is
about 300,000 b/d lower than May levels, from the more accurate monthly data.
Iraq has resumed pumping oil from fields operated by state-run North Oil Company (NOC) via
a Kurdistan Regional Government (KRG) pipeline to Turkey, a spokesman for the oil ministry
in Baghdad has said. About 70,000 b/d are being pumped through the pipeline controlled by
the Kurdistan regional authorities, spokesman Asim Jihad told Reuters, giving no further details.
Pumping stopped in March due to a dispute between the government in Baghdad and the KRG
over the control of Kurdish oil exports.
Last week’s report of injection of natural gas into storage was just 22 Bcf, which was less than half
the average increase of 55 Bcf at the same time of year between 2011 and 2015. Gas storage
has increased by less than normal in 17 of the last 20 weeks. This is primarily due hotter than
normal summer temperatures that have accounted for record demand for air conditioning and
thus electricity demand.
Temperatures have been consistently higher than normal in June, July and August across most
of the U.S. Gas in storage was 3,339 Bcf as of 8/12/2016, according to the EIA. With about 90
days left in injection season, assuming normal weather would put storage levels at about 3.95 Tcf
well under 4.2 Tcf maximum storage capacity.
WTI crude oil was up nearly 9% last week, in our opinion due to the continued reporting of OPEC
members potentially meeting to discuss a freeze of production, even though consensus opinion
seems to be that there is little expectation the cartel will act.
The weekly EIA report on U.S. oil production reported total U.S. production increased by
approximately 152,000 b/d week over week, but the EIA highlighted this increase was due to a
“re-benchmarking” of the weekly production data series to the more accurate monthly production
data. Nonetheless, this re-benchmarked weekly production for early August of 8.6 million b/d is
about 300,000 b/d lower than May levels, from the more accurate monthly data.
Iraq has resumed pumping oil from fields operated by state-run North Oil Company (NOC) via
a Kurdistan Regional Government (KRG) pipeline to Turkey, a spokesman for the oil ministry
in Baghdad has said. About 70,000 b/d are being pumped through the pipeline controlled by
the Kurdistan regional authorities, spokesman Asim Jihad told Reuters, giving no further details.
Pumping stopped in March due to a dispute between the government in Baghdad and the KRG
over the control of Kurdish oil exports.
Last week’s report of injection of natural gas into storage was just 22 Bcf, which was less than half
the average increase of 55 Bcf at the same time of year between 2011 and 2015. Gas storage
has increased by less than normal in 17 of the last 20 weeks. This is primarily due hotter than
normal summer temperatures that have accounted for record demand for air conditioning and
thus electricity demand.
Temperatures have been consistently higher than normal in June, July and August across most
of the U.S. Gas in storage was 3,339 Bcf as of 8/12/2016, according to the EIA. With about 90
days left in injection season, assuming normal weather would put storage levels at about 3.95 Tcf
well under 4.2 Tcf maximum storage capacity.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group