December 6, 2019

December 6, 2019
Share
Print Friendly, PDF & Email
  • 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

Access Our Deeper Market Insights

Product Factor Matrix

Proprietary view of priced-in factors driving the market vs. potential bullish and bearish surprises.

Learn More

Trading Recommendations

Clear trading recommendations based on real market opportunities that enable clients to take action.

Learn More

Market Data

A comprehensive suite of the latest curves, spot pricing, settles, and strips to drive confident hedging decisions.

Learn More

Benchmarking and Trade Analytics

Real-time access to analyze your hedging strategy against AEGIS benchmarks and current market activity.

Learn More