November 29, 2019

November 29, 2019
Print Friendly, PDF & Email
  • WTI is down 32c to $57.79/Bbl, and Brent is down 60c to $63.27/Bbl
    • If oil prices hold steady today, this would be the fourth straight week of price gains, a first since April this year
  • Saudi Arabia may take a harder line in requiring OPEC “cheaters,” those countries producing more than current OPEC quotas, to cut their production instead of Saudi Arabia taking up the slack (Bloomberg, Energy Aspects”
    • Some “cheaters” include Iraq (producing 300 MBbl/d extra), Kazakhstan (100 MBbl/d), and Nigeria (120 MBbl/d), while non-OPEC participant Russia produced more than promised most of the year
    • Meanwhile, Saudi Arabia had reduced its production by 700 Mbbl/d
    • A full OPEC meeting is scheduled for the end of next week
  • AEGIS notes a lack of continued OPEC supply cuts at its meeting next week would be a bearish development
    • OPEC members’ rhetoric ahead of the meeting are for status quo production quotas
    • Reaffirmation of this policy is neutral for price, in our view. We classify deeper cuts as a surprise, and bullish.
  • Oil rigs operating in the US are down to 668 as of November 29 data, according to Baker Hughes
    • The 4Q slump continues; there were 713 oil-directed rigs operating at the end of September
    • A year ago, the count was 887
  • Natural gas is down 10.0c to $2.401/MMBtu
  • US gas markets were closed yesterday for the Thanksgiving holiday
  • Weather forecasts shifted to a colder Northeast and warmer West/Rockies in the 6-10 day period
    • However, temperatures shifted warmer for all but the East in the end of the 14-day forecast, which may signal a risk of milder weather toward the middle of December
    • Blocking patterns that can direct arctic air into the Great Lakes and Eastern US failed in some of the forecasting models
  • EIA reported a storage draw of -28 Bcf for the week ending 11/15/2019. This was slightly larger than the median estimate of -25 Bcf, and prices were hardly changed after the government’s announcement.
    • Storage usually decreases by 57 Bcf during that week of the year
    • The smaller withdrawal – compared to normal and last week’s -94 Bcf figure – was due to much milder temperatures throughout the US
  • A butadiene plant in Port Neches, TX (between Beaumont and Port Arthur) experienced two explosions on Wednesday, requiring community evacuations (AP)
    • Yesterday, owner TPC Group’s managers said the plant would continue to burn through Friday to prevent more explosions
    • AEGIS notes butadiene can be a product of the cracking process when heavier NGLs are used as feedstock in a steam cracker, but the output is small compared to other cracker products. The effect on NGLs prices is likely minor.

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