November 30, 2020

November 30, 2020
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  • WTI is down 14c to $45.39/Bbl, and Brent is down 41c to $47.77/Bbl
  • OPEC+ members to begin formal talks on extending oil cuts or increasing output
    • The group met on Sunday but failed to reach an agreement prior to Monday’s formal talks
    • The group is set to ease production cuts by 2 MMBbl/d starting in January; however, the decision has been complicated by rising Libyan output and an increase in coronavirus infections
    • OPEC+ members Kazakhstan and the UAE have expressed concerns about extending the oil cuts, according to Reuters
  • Oil may reach $65/Bbl in 2021 as an inflection point is reached in 2H2021 (Goldman)
    • The market will be supported by a vaccine-led rebound in demand, and a “modest” non-OPEC supply response
    • The price forecast is contingent on an extension of the OPEC+ output cuts. If the cuts are not extended, Goldman foresees $5/Bbl in downside from current levels
  • The Baker Hughes oil rig count gained 10 rigs to bring the total gas rig count to 241
    • The major basins, Permian, Eagle Ford, and Denver-Julesburg, added five, three, and one rig, respectively
  • Natural gas is up 7.9c to $2.922/MMBtu
  • After this morning’s rise, natural gas for January is close to $3.00 MMBtu once again
    • In the mid-$2.90’s, January is up over 30c from just 11 days ago, but still about 40c from its high of $3.35 on Oct. 30
    • Weather models showed an overall cooler shift in the Lower 48, most in the west for the 6-10 day window and southeast and east for the 11-12 day time-period
    • A total of 3.7 HDDs, or about 7 Bcf, was gained from Friday to Monday, according to Commodity Weather Group
  • The Nord Stream 2 pipeline, led by Gazprom, is set to resume pipe-laying work in German waters sometime between Dec. 5 and Dec. 31, according to a notice to sea-farers (S&P)
    • The 765-mile pipeline under the Baltic Sea only lacks about 75 miles in German and Danish waters to be complete (Pgjonline)
    • U.S. sanctions against pipeline vessels operated by Swiss-Dutch Allseas halted work last December
    • Nord Stream 2 is seen as a threat to LNG imports into Europe as more piped gas will reach Germany, and thereby other parts of Europe, from Russia

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