- WTI is down 61c to $57.82/Bbl, and Brent is down 42c to $62.97/Bbl
- Oil prices are steady after OPEC failed to reach a formal agreement on Thursday after meeting for six hours
- OPEC+ ministers meet today in Vienna and are expected to reach an agreement
- OPEC plans to take on 2/3 of the 500 MBbl/d production cut and OPEC’s allies (mostly Russia), are expected to shoulder 1/3 of the cut
- Unfortunately for many bulls, the production cuts will be mostly cosmetic and will likely not change the fundamentals much
- The group’s current cut deal is for 1.2 MMBbl/d and with the additional 500 MBbl/d, totals 1.7 MMBbl/d
- In reality, OPEC+ has already been over complying with cuts at about ~1.6 MMBbl/d with the Saudis responsible for most of the over-compliance
- AEGIS will provide more detail is its Market Summary as it comes out later on Friday
- Natural gas is down 4.2c to $2.385/MMBtu
- The EIA reported a -19 BCf withdrawal for the week ending November 29, this was less than the -62 Bcf withdrawal in the corresponding week last year
- Trading following the report was flat, suggesting that this small withdrawal was already priced in
- The next two weeks of withdrawals are forecasted to be much more significant at -77 and -103
- Williams’ CEO expects more gas growth from the Northeast region as associated gas alone is not enough to keep up with demand, thus prices need to support gas-directed drilling
- Their CEO also doesn’t believe that there should be any steep price spikes due to coal-to-gas switching
- AEGIS notes that coal starts to become more prominent in the generation mix around $2.70/MMBtu
- The company is also withdrawing capital for the Northeast Supply Enhancement Project due to permitting issues with New York and New Jersey
- Their CEO also doesn’t believe that there should be any steep price spikes due to coal-to-gas switching
