Canadian Insight into the markets here and abroad
Thursday, July 30, 2020
Editor’s oil & gas markets analysis and weekly U.S. Energy Information Administration reports...
Did you know?
The ancient people of Greece, Persia, and India discovered natural gas many centuries ago. These people were mystified by the burning springs created when lightning ignited natural gas seeping from cracks in the ground. They sometimes built temples around these eternal flames so they could worship the fire.
Markets commentary for Thursday, July 30, 2020
Brent, WTI crude oil and natural gas prices in the US are down this morning. The only commodity that is surging up is gold. This is mainly due to uncertainty in the global economy. Many nations are struggling with keeping the covid pandemic under control.
Brent crude oil is down by 2.49% and bids for September are $42.65 per barrel and WTI was down by 3.20%. WTI bids for September this morning were $39.95 per barrel. Nymex natural gas prices are down by 4.40% and bids at $1.85 per MMBtu.
Natural gas prices basis Calgary have been in the range of $2.02 to $2.10 per gigajoule. Future prices for Alberta natural gas market looks to have been improving die to lower inventories.
Markets commentary for Wednesday, July 29, 2020
Energy Information Administration released its weekly petroleum inventory report this morning. Report indicates an decrease in crude oil and total inventories. Gasoline, distillates and propane inventories were up. Refineries increased their operations marginally as compared to the previous week.
Crude oil imports decreased by 800,000 barrels per day and averaged at 5.1 million barrels per day. Four week average was 6.0 million barrels per day and 13.6% less than the 4 week average last year.
US commercial inventories of crude oil decreased by 10.6 million barrels and totaled at 526.6 million barrels. Storage volumes are 17% above the 5 year average.
Supplies of gasoline increased by 0.7 million barrels. Distillates inventories increased by 0.5 million barrels. Propane supplies increased by 2.0 million barrels as compared to the previous week. Total petroleum inventories decreased 6.5 million barrels last week.
US refineries decreased their operations by 1.4% over the previous week and operated at 79.5% of their optimum operating capacity. Operations processed 14.6 million barrels per day, and produced 9.2 million barrels per day of gasoline and 4.8 million barrels of distillates daily.
Markets commentary for Tuesday, July 28, 2020
Crude oil prices are down marginally this morning. This is an indication that markets are becoming more stable.
Brent crude oil dropped by 0.16% and bids for September at $43.34 per barrel. WTI crude oil is down by 0.87% and bids for September at $41.24.
Commodity markets are continuing to ride uncertainty as to the pending covid-19 pandemic. Cases have once again risen throughout US Europe and Asia. Gold markets are in the limelight through these uncertain times.
Investors will be keeping an eye on today’s API petroleum estimates and tomorrow mornings EIA fundamental petroleum report.
Markets commentary for Monday, July 27, 2020
Crude oil markets begin the week on the with a bit of pessimism as tensions between China and US increase. Both Brent and WTI crude oil prices are down.
Brent is down by 1.5% and WTI crude oil is down by 1.53%.September bids for Brent crude oil are $42.62 per barrel. WTI crude oil bids for September are $40.63 per barrel.
On the positive side, crude oil demand in the second quarter has improved over the first quarter. Global surplus of crude oil has almost disappeared. Oil prices have stabilized as compared to six weeks ago.
Latest oil rig activity in the US shows that the downward trend in drilling may be ending. For the first time in over 3 months, oil rig count rose by one last week to 181 rigs. Some analysts believe that this may be a major turning point.
Markets commentary for Thursday, July 23, 2020
Crude oil markets are down following several days of stable prices. Brent crude oil is down by 1.06% and bids for September are $43.82 per barrel. WTI crude oil is down by 0.84% and bids for August are $41.55 per Barrel.
Alberta Natural gas on the spot bids basis Calgary this week have varied from $1.79 per gigajoule to $1.96 per gigajoule. This reflects the uncertainty in the Western Canadian economy and in particular the oil sands in Alberta. The oil sands consumed a considerable amount of natural gas in processing. This will be a noticeable change.
US natural gas prices are under economic pressure as well and are in uncertain times. What was once a Cinderella story, natural gas optimism now has waned. LNG exports have fallen considerably. Lack of a trade agreement with China has not helped improve the situation. The covid-19 pandemic has added to the problems associated.
Nymex natural gas remains unchanged this morning and bids are at $1.68 per MMBtu. Henry Hub natural gas bids for August are up by $0.022 and trading at $1.716 per MMBtu. November trading sees prices well over $2 per MMBtu. Trading today at $2.313 per MMBtu.
Markets commentary for Wednesday, July 22, 2020
Energy Information Administration released its weekly petroleum inventory report this morning. Report indicates an increase in crude oil, gasoline, distillates, propane and total inventories.. Refineries decreased their operations marginally as compared to the previous week.
Crude oil imports increased by 373,000 barrels per day and averaged at 5.9 million barrels per day. Four week average was 6.2 million barrels per day and 13.5% less than the 4 week average last year.
US commercial inventories of crude oil increased by 4.9 million barrels and totaled at 536.6 million barrels. Storage volumes are 19% above the 5 year average.
Supplies of gasoline decreased by 1.8 million barrels. Distillates inventories increased by 1.1 million barrels. Propane supplies increased by 2.0 million barrels as compared to the previous week. Total petroleum inventories increased 8.8 million barrels last week.
US refineries decreased their operations by 0.2% over the previous week and operated at 78.1% of their optimum operating capacity. Operations processed 14.2 million barrels per day, and produced 9.1 million barrels per day of gasoline and 4.8 million barrels of distillates daily.
Markets commentary for Tuesday, July 21, 2020
Crude oil markets starting the day on a more positive note; Both Brent and WTI crude oil bids are up this morning. Brent crude oil prices are up by 3.3% and bids for September are $$44.71 per barrel. WTI crude oil is up by 3.41% and bids for the month of August is $42.14 per barrel.
Commodity and oil markets have gained hope today that global economy will gain traction with the arrival of numerous vaccines to combat the coronavirus. Early data shows that there may be a breakthrough in an effective vaccine and its use may be as possible as near the end of this year.
During the past month, China has been on a crude oil buying spree. Indications are that this may end soon as it has stockpiled a huge inventory. This may effect the global oil markets as China’s demand will lessen and global oil supplies increase.
Markets commentary for Monday, July 20, 2020
Crude oil markets seeking direction; Brent crude oil is down while WTI is up. Brent crude oil is down by 0.77% and bids for September are 443.08 per barrel. WTI crude oil is up by 0.05% and bids for August are $40.61per barrel.
Soaring coronavirus case is making an impact on the stock and commodity markets. Notable US senators are pushing for a stimulus package for additional relief. Democrats are asking for a sum of $3.5 billion while the Republicans are indicating they do not want to spend more than $ 1 trillion.
Latest rig counts in the US is continuing fall in oil and natural drilling. This is the eleventh week that US rig activity is down. Rig count in Canada has fallen to historic levels but seems to be slowly reviving . Total rig count has risen from 26 to 32 active rigs in the past week.
Markets commentary for Friday, July 17, 2020
Crude oil prices ending the week on a downward trek. Brent crude oil is down by 0.83% and bids for September are $43.01 per barrel. WTI bids for August are down by 0.71% and $40.46 per barrel.
OPEC and its allies has agreed to reduce its cuts from 9.7 million barrels per day to 7.7 million barrels per day. OPEC stated global economy has recovered enough to absorb the increase in crude oil output.
Faith Berol, Executive Director of International Energy Agency, stated recently that global oil markets are beginning to rebalance. He predicts that crude oil prices in the coming months will be about $40 per barrel.
Chief Executive of Royal Dutch Shell stated that global economic recovery will not make a sharp recovery; this will take many years before oil prices and demand increases considerably.
WCS / WTI
Price Spread ↓-$9.35
July 30, 2020
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