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First Look - Crude production returning after North Sea shutdown

November 19, 2024 | Christian Drolshagen

Oil is trading higher, extending gains from yesterday
- WTI prices rallied more than $2/Bbl yesterday, as prices recovered from recent lows
- Yesterday, the US gave Ukraine approval to use western supplied missiles against targets within Russia
- Concerns over oil demand in 2025 continue to weigh on the market
Equinor restarts production in North Sea (BBG)
- A power outage caused a shutdown at the Johan Sverdrup oil field yesterday, but production is expected to be restored to two-thirds of capacity today
- The field produces about 755 MBbl/d, accounting for about 7% of daily European consumption
- Equinor stated that a converter station overheated resulting in a power loss

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Prompt month Henry Hub traded 6c lower to $2.90 (7:45 AM) on Tuesday morning while the nearby cash price hovered just above $2.10 on ICE
- Weather models continue to show a cold push across the US on Thanksgiving, give or take a day, depending on what model (CWG)
- The holiday temperature drop is helping the December contract trade close to $3.00, while mild weather keeps the daily cash price lower
- AEGIS notes that typically, cold weather events in winter that have a bearish fundamental background (high storage) can provide hedging opportunities when prices run on inbound cold
  - In a bearish market (not near-term fundamentally bullish) for natural gas, price gains driven by cold weather tend to be short-lived if the chill doesn't hold or temperatures quickly revert to milder conditions. A temporary spike in demand from cold snaps may cause prices to rise, but a swift return to warmer weather often brings prices back down
Trump Administration's Energy Appointments: A New Direction (NGI)
- Chris Wright's Appointment: Wright, founder of Liberty Oilfield Services, will serve as the Secretary of Energy and a member of the newly formed National Energy Council, focusing on energy innovation and reducing regulatory constraints
- Focus on Domestic Energy Production: The National Energy Council, led by former North Dakota Governor Doug Burgum, aims to streamline federal energy policy and enhance US energy dominance by cutting bureaucratic obstacles
- Analysts expect a rollback of Biden-era climate regulations while acknowledging the energy transition will continue, driven by market fundamentals and subnational policies
- AEGIS notes that while new appointments are much more friendly to the oil and gas sector, impacts to price are likely minimal in most hedging windows

First Look - Crude production returning after North Sea shutdown

November 19, 2024 | Christian Drolshagen

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First Look - Crude production returning after North Sea shutdown

November 19, 2024 | Christian Drolshagen

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