December 4, 2020

December 4, 2020
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For additional natural gas insight:

Natural Gas Suffers Large Losses Across the Curve

Weather alone can’t explain it.
After gas storage stats were announced this morning (Thursday, December 3), gas prices…Read More

Weather Has Stymied the Gas Bulls

Early “winter” weather has been disappointing for those with a bullish point of view. Gas prices…Read More

  • WTI is up 28c to $45.92/Bbl, and Brent is up 38c to $49.09/Bbl
  • WTI has pared losses from earlier this week and is on track for its third consecutive weekly advance
    • OPEC+ reaches a consensus on oil output cuts, providing oil price reassurance
    • WTI has also received support from a weakening U.S. Dollar, which reached a 30-month low on Thursday
  • OPEC+ reaches a compromise on oil cuts
    • After five days of turbulent negotiations, the group members came to a consensus to return 500 MBbl/d of output next month. Members will convene each month after that to decide whether the output cuts should be eased or strengthened based on the state of demand
    • AEGIS notes this announcement contrasts with the previously expected move of an outright delay of output hikes by three months. Still, oil prices rallied on the news, signaling that the market is content with the agreement
  • The U.S. Dollar reached a 30-month low as investors direct capital towards riskier assets
    • As news of a vaccine reassures global markets, demand optimism has taken off. The vaccine and its impact on a demand recovery are luring investors towards more risky assets instead of holding the safer currency
    • Hopes of an agreement on a stimulus package pressured the U.S. Dollar further. A bipartisan, $908 billion coronavirus aid package gained momentum in Congress as lawmakers on both sides of the aisle express support
  • Natural gas is up 0.9c to $2.516/MMBtu
  • Natural gas prices were eviscerated on Thursday with the entire gas curve feeling the pain
    • The January contract lost 27c to settle at $2.507/MMBtu, and shockingly, the full 2021 strip fell 21c to end the day at $2.564/MMBtu
    • AEGIS discusses this in more detail here
  • U.S. natural gas in storage fell by only 1 Bcf during the Thanksgiving holiday, much higher (bearish) than what analysts were expecting
    • Inventories declined to 3.939 Tcf for the week ended November 27, according to the EIA data release on Thursday
    • Analysts were expecting closer to a 14 Bcf pull on stocks
    • The decline of only 1 Bcf was the second most bearish weekly statistic in at least the last 10 years for the same corresponding week
      • AEGIS notes that last week did include the Thanksgiving holiday which can lead to lower demand

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