December 8, 2020

December 8, 2020
Share
Print Friendly, PDF & Email
  • WTI is down 36c to $45.40/Bbl, and Brent is down 26c to $48.53/Bbl
  • Oil prices are trading slightly lower this morning
    • UAE exports to Asia slated to increase following OPEC+ agreement reached last week
    • OPEC production reaches its highest levels since a deal was reached in May as exempt members continue to increase output – threatening an already fragile market
  • The UAE eases its oil supply cuts to Asia following compromise reached at last OPEC+ meeting (Bloomberg)
    • The country will be allowed to produce an extra 38 MBbl/d
    • January shipments will be cut by 5-20% versus a 20% reduction for all grades loading in December
    • UAE output rose for the first time in three months during November
  • Libya’s increasing output pushes OPEC+ production to six-month high (Platts)
    • OPEC produced 24.54 MMBbl/d in November, up by 670 MBbl/d from October. This is the most OPEC has produced since reaching its historic deal in May
    • Exempt members, Libya, Iran, and Venezuela, added more than 600 MBbl/d in output during November
    • AEGIS notes that increasing output by countries exempt from OPEC+’s agreement may complicate further negotiations. The 600 MBbl/d increase during November would equate to around 33% of the 2 MMBbl/d of production OPEC+ is slated to return to the market in 2021
  • Natural gas is up 2.7c to $2.433/MMBtu
  • Natural gas for the January contract hit a 2020 low of $2.40/MMBtu on Monday as weather forecasts shifted warmer
    • January gas is now down $1.06/MMBtu from the October 21, 2020 high of $3.471
  • The amount of gas flowing into U.S. LNG facilities hit a new record of 11.5 Bcf/d according to Platts
    • Strong Asian spot pricing has helped U.S. LNG operate at or near capacity
    • Gas delivered into Northeast Asia, the price known as JKM, closed December 7 at $8.32/MMBtu. This was about four times the price of the LNG marker’s low of $1.825/MMBtu reached on April 28
    • AEGIS notes that some 175 cargoes across the U.S. were canceled earlier this year because of low international pricing and lower demand, according to ING
  • Weather models provided little net change over the past 24 hours with some cooler temperatures in the 6-10 day window but also some more warmth in the Northeast
    • The net effect was a loss of about 3 bcf over the next 15 days (Commodity Weather Group)
    • If we incorporate December forecasts, November-December 2020 period is lining up to be in the top five warmest on record, according to CWG
    • Commodity Weather Group notes that the history of super-warm winter start suggests that the first quarter of the new year should also run warm to very warm

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