Gelber & Associates’ Post

Gelber Gas Daily (+ crude!) #NaturalGas -- Gelber & Associates Predicts +56 Bcf Injection Into Storage for Week Ended July 5th: NYMEX natural gas futures are down -$0.04, last trading at $2.30/MMBtu. Beryl’s impact continues to be felt as 1.7 million people remain without power in Texas. The Freeport LNG terminal is likely without power as well; outage trackers show that electricity provider Centerpoint is currently assessing the area. The facility did show a slight increase in flows, however, rising 0.15 Bcf/d from nearly zero in the days previous. Meanwhile, elevated variance between early- and late-cycle production data continues to bring sharp revisions to daily estimates. Following Monday’s rare downward revision, yesterday’s final nominations erased Tuesday’s initial production drop. This morning’s data shows a modest 0.3 Bcf/d change, which would leave net output at an estimated 100.3 Bcf/d. For the week ended July 5th, Gelber & Associates is expecting a +56 Bcf injection into natural gas storage. That would bring the current surplus to the 5-year average to 495 Bcf and the year-ago surplus to 274 Bcf, representing the ninth week in a row that the surplus would continue to slim. Next week’s storage will have two factors that will cause greater-than-normal uncertainty around the data release: the demand impact brought on by the Independence Day weekend, as well as the impact of Hurricane Beryl on the South Central region. Volatility next Thursday should be higher as a result. #Crude -- EIA Weekly Petroleum Report Bullish for Crude & Gasoline, Powell Testifies Before Congress: Crude oil futures are up $0.87, last trading at $82.28. While price action around Independence Day has formed a local top so far, today saw a rebound from the $80 area prompted by the release of the EIA’s Weekly Petroleum Report. Crude inventories showed a 3.4 million barrel drop, and gasoline inventories showed a 2 million barrel draw as well, likely helped by holiday-related travel. Federal Reserve Chair Jerome Powell is currently testifying before the Senate Banking Committee, bringing increased volatility as participants position around rate cut expectations. #Oilandgas #Commodities #NYMEX #HenryHub #Trading #Hedging #Gelber #markets #LNG #OPEC #oil #EIA #gas #gelber #WTI #Energy #FreeportLNG #Beryl #Centerpoint

Gelber Gas Daily (+ crude!) #NaturalGas -- Beryl Makes Landfall in Texas, Leaving 2.6 Million Without Power & Freeport Offline: NYMEX natural gas futures are up $0.04, last trading at $2.36/MMBtu. Over the long weekend, production remained strong at 102.4 Bcf/d. This morning’s initial data showed little change at 102.6 Bcf/d. Tropical Storm Beryl touched down in the southeast of Texas early this morning and has been causing substantial damage due to winds sustained at approximately 80 mph. Recent forecasts show Beryl moving up through Texas before going northeast through Arkansas. Currently, over 2.6 million people in Texas are estimated to be without power. Most oil & gas facilities, however, prepared for the storm’s landfall over the weekend, allowing most to avoid the brunt of the storm’s impact. A notable caveat to the above statement is that of Freeport LNG, which is offline while the storm passes. A filing noted, "Trains 1, 2, 3 were proactively shutdown due to impacts associated with Hurricane Beryl." That preparation made its mark in fundamentals, with LNG feedgas demand measured lower at 11.1 Bcf/d today. The Freeport terminal may be offline for some time, as the power outages caused by Beryl could leave the terminal without power, even if it sustains no direct infrastructure damage. Direct damages could see Freeport offline for weeks. That said, gas receipts at the other LNG terminals indicate that they are unaffected so far. #Crude -- Oil Facilities Mostly Unaffected by Beryl, Metric Indicates Lower Demand from ChinaCrude oil futures are down -$0.59, last trading at $82.56/bbl. Some derisking flows this morning are partially responsible for the move down, as hedges placed ahead of Beryl’s landfall were unwound due to crude oil facilities sustaining relatively little damage in affected areas. Over the weekend, a bearish metric showed that the number of oil supertankers bound for China has recently dropped to a two-year low. The superpower and the direction of its total demand for crude going forward continue to be instrumental in dictating broad sentiment. #Oilandgas #Commodities #NYMEX #HenryHub #Trading #Hedging #Gelber #markets #LNG #OPEC #oil #EIA #gas #gelber #WTI #Energy #HurricaneBeryl #Beryl #Houston #Texas

Gelber Gas Daily (+ crude!) #NaturalGas -- EIA Reports +32 Bcf Injection Into Natural Gas Storage for Week Ended June 28th: NYMEX natural gas futures are flat on the day, last trading at $2.44/MMBtu. A press release from the governor of Texas earlier this week noted that the state’s $5 billion loan program for natural gas-fired power plants should double in size in order to meet rising power demand. Governor Greg Abbott’s statement noted, “Texas may need 150,000 megawatts of power to power our grid by 2030…with the new projections for 2030, we will seek to expand the program to $10 billion to build more new plants as soon as possible.” Governor Abbott and Lieutenant Governor Patrick are now calling for an immediate policy review. Voters approved the Texas Energy Fund to finance 10 GW of gas-fired plants, with loan applications already oversubscribed. Companies like NRG Energy and Vistra Corp. have applied for funding, contingent on regulatory approvals. The EIA’s Weekly Storage Report released late this morning ahead of the holiday showed a 32 Bcf injection for the week ended June 28th, on the higher end compared to most expectations. Perhaps more notably, the agency revised its earlier week’s storage release numbers. Having previously reflected a 52 Bcf injection, the new data for the week ended June 21st now shows that 57 Bcf of gas was injected into storage. The cumulative effect of the changes in today’s report is that total levels sit at 3134 Bcf, leaving the surplus to the 5-year average at 496 Bcf. Meanwhile, Hurricane Beryl (95L) has developed substantially, currently a Category 5 hurricane; however, current projections indicate that the development will subside into a tropical storm by the time it reaches Texas’ southern border. #Crude -- Jobless Claims Higher Than Expected, Bullish Miss in EIA Crude Inventories Numbers: Crude oil futures are up $0.25, last trading at $83.06/bbl. Data out of the Labor Department this morning showed a rise of 238,000 in jobless claims for the week ended June 29th. An upside miss in this metric had brought optimism for risk-on assets in previous months, as a less resilient labor market can mean that the Federal Reserve has more grounds to begin rate cuts. That said, the number was only a touch higher than market consensus. Also bullish was the EIA’s Weekly Petroleum Report which showed an unexpectedly large draw on crude inventories. #Oilandgas #Commodities #NYMEX #HenryHub #Trading #Hedging #Gelber #markets #LNG #OPEC #oil #EIA #gas #gelber #WTI #Energy

Gelber Gas Daily (+ crude!) #NaturalGas -- Gelber & Associates Forecasts +34 Bcf Injection Into Storage for Week Ended June 28th: NYMEX natural gas futures are down -$0.06, last trading at $2.42/MMBtu. In late March we reported on a lawsuit from more than a dozen states claiming the Biden administration’s pause on LNG exports was unconstitutional. Yesterday, a Louisiana federal judge ordered the Biden administration to lift that pause for new projects until the case has been resolved. The White House had announced the pause in January, stating that its intent was to update the Department of Energy's public interest analyses. The court's new order prevents officials from halting the approval process but doesn't mandate immediate permit approvals or set deadlines. The DOE, disagreeing with the ruling, is reviewing the court's order, in which the judge argued that the suspension lacked detailed justification and was a significant policy reversal. Because of the holiday this week, the storage report schedule has been accelerated, meaning the report for the week ended June 28th will be released tomorrow. Gelber & Associates is forecasting a 34 Bcf injection into storage, well below last year’s build of 76 Bcf and the 5-year average injection for this time of year of 69 Bcf. The supply/demand balance last week was primarily influenced by weather, as hotter temperatures caused significant power burn that more than offset drops in other demand factors such as LNG feedgas demand, as well as increases in production. Market estimates across the board indicate that the injection will mark two months of consecutive drops in the current surplus to the 5-year average. #Crude -- Jobs Data Mainly In-Line With Expectations, Powell Indicates More Data Needed Before Cuts: Crude oil futures are flat on the day, last trading at $83.23/bbl. In his talks during a European Central Bank conference in Portugal, Fed chair Jerome Powell noted that further data would be required before the Federal Reserve could verify the weakness of inflation and begin cuts to interest rates. Jobs data released today showed an increase in job openings by 221,000 which was slightly higher than market expectations. Federal funds futures indicate increased optimism so far, with markets indicating a 67% chance of cuts in September. That said, traders are keenly awaiting Powell’s remarks at the FOMC Minutes tomorrow. #Oilandgas #Commodities #NYMEX #HenryHub #Trading #Hedging #Gelber #markets #LNG #OPEC #oil #EIA #gas #gelber #WTI #Energy

Gelber Gas Daily (+ crude!) #NaturalGas -- LNG Continues Up, Chevron Deference Spells Significant Impact on Regulation: NYMEX natural gas futures are down -$0.10, last trading at $2.50/MMBtu. Production was able to hit slightly above 102 Bcf/d this weekend before coming back down -0.8 Bcf/d to 101.3 Bcf/d as of today’s early-cycle nominations. LNG feedgas continued its uptrend, hitting 12.9 Bcf/d today after recovering from a now-concluded unplanned maintenance event at the Freeport terminal. Initial data indicates that June marked yet another record for cargoes sent through the Cape of Good Hope’s shipping route, as LNG traders continued to avoid the Panama Canal when shipping to the high-priced LNG markets in Asia. Last week, however, the Canal’s authority announced an additional booking slot for cargoes seeking passage as previous constraints from low water levels are now less of an issue. So far, the time and monetary cost of using the Canal has outweighed that of the Cape for sellers of international LNG; last month, just 3 carriers passed through the route compared to 35 at the Cape of Good Hope. On Friday, the US Supreme Court overturned the Chevron deference in what will likely have wide-sweeping effects on the regulatory landscape. The deference comes from a 1984 case which found that federal regulatory agencies are the authority in cases where regulatory statutes are ambiguous. Both courts and Congress have used the case as precedent for over 4 decades, leaving the interpretation of ambiguous laws to agencies. With the deference overturned, the onus will be on the courts for interpretation of unclear statutes. Liberal justices, in dissent, noted that the move could lead to judicial overreach in areas like environmental protection and public health. Chief Justice Roberts argued that agencies lack the competence to resolve statutory ambiguities, a task better suited for courts. Existing laws that previously relied on agency interpretations are now in question if they are revisited. #Crude -- Crude Market Participants Await FOMC Announcements Ahead of HolidayCrude oil is up $1.72, last trading at $83.26/bbl. The latest Baker-Hughes oil & gas rig count data showed that for the week ended June 28th, oil rigs were down -6 to 479 rigs, representing a low not seen since early 2022. The upcoming holiday which should cause thinner-than-normal books combined with some important dates will likely result in increased volatility this week. Tomorrow, Federal Reserve chair Jerome Powell is scheduled to speak at a European Central Bank forum; on Wednesday at 2 PM EST, FOMC minutes are scheduled. Meanwhile, stock indices briefly made all-time highs intraday on Friday, though they remain mostly flat today. #Oilandgas #Commodities #NYMEX #HenryHub #Trading #Hedging #Gelber #markets #LNG #OPEC #oil #EIA #gas #gelber #WTI #Energy #chevrondeference

Gelber Gas Daily (+ crude!) #NaturalGas -- MVP Flows Ramp Up Along With Their Market Impact, Production Ends Week Strong: NYMEX natural gas futures are down -$0.06, last trading at $2.63/MMBtu. Today’s early-cycle data indicate an 0.4 Bcf/d change in production to bring net output to 101.2 Bcf/d. Overall, production has had a strong week; every day but Wednesday came in closer to 101 Bcf than the baseline 100 Bcf/d the market has grown accustomed to. The strength there is weighing heavily on prices, even in the wake of a relatively bullish 52 Bcf injection reported by the EIA’s Weekly Storage Report yesterday. Meanwhile, LNG feedgas shook off some midweek weakness as Tuesday’s 11.2 Bcf/d reading has recovered to 12.8 Bcf/d following a stronger Thursday and then today’s 0.3 Bcf/d early-cycle change. The recently-built Mountain Valley Pipeline which connects to Transco saw an +0.25 Bcf/d increase in flows to end the week. Those ramping deliveries from MVP are flowing to the upper areas serviced by Transco, leading to stagnation of the gas in the Southeast/Henry Hub area that would otherwise be flowing northward to service those regions. We attribute the weakness seen in Henry Hub spot prices this morning to this dynamic. This bearish effect was well-anticipated by many market participants (including in G&A’s 5-Year Forecast back in February); sufficient clarity on the timing of it, however, has come about more recently and participants are now adjusting accordingly. There is still uncertainty about MVP flows in the immediate future, however. Equitrans LP will be reducing their flows into the pipeline beginning July 1st, and the pipeline itself already has scheduled maintenance starting on the 9th. #Crude -- May's Inflation Measure In-Line With Expectations, Bringing Some Price Support: Crude oil is down -$0.29, last trading at $81.45/bbl. May’s reading of the closely-tracked Personal Consumption Index matched market expectations of 2.6% on both the regular and core versions of the metric, indicating lower inflation than last month’s 2.7%. A bearish miss in the EIA’s Weekly Petroleum Report seems to have overall been shaken off by crude, with participants intently watching for further Federal Reserve guidance. Presidential election dynamics are also becoming increasingly relevant to markets broadly, including crude, as November draws closer. Election prediction markets reflect increased odds of a Trump victory following yesterday’s presidential debate. #Oilandgas #Commodities #NYMEX #HenryHub #Trading #Hedging #Gelber #markets #LNG #OPEC #oil #EIA #gas #gelber #WTI #Energy #trump #biden #presidentialdebate #debate

Gelber Gas Daily #NaturalGas -- Corpus Christi LNG in Good Graces with Ferc; Natural Gas Production Returns to 100 Bcf/D: Corpus Christi LNG in Good Graces with Ferc; Natural Gas Production Returns to 100 Bcf/D. NYMEX Henry Hub natural gas 202 futures are trading down an average of 6 cents per contract early afternoon. July prompt month was last trading at $2.75/MMBtu, shedding nearly half of yesterday's 13 cent rally. With respect to market fundamentals, after a few weeks of natural gas production hovering below 99 Bcf/D, production has returned to triple digits, holding above 100 Bcf/D. While weather remains hot, upside in the market remains limited this summer due to the current storage overhang of nearly 343 Bcf/D. In recent demand-related news, US Federal Energy Regulatory Commission (FERC) has just reviewed Cheniere's plan to expand its Corpus Christi LNG facility in Texas. They found that the proposed expansion, which includes two new liquefaction trains, would not significantly impact the environment. The expansion aims to add 3 million metric tons per year of LNG capacity. Construction and operation of the project will produce emissions, but FERC staff stated they cannot determine the exact environmental impact of these emissions. FERC is accepting public comments on this environmental assessment until July 22. Cheniere hopes to start the project as early as 2028 and complete it by 2031. Meanwhile, Cheniere is also working on a larger expansion, expected to start producing LNG by the end of 2024 and be fully operational by 2026. #Oilandgas #Commodities #NYMEX #HenryHub #Trading #Hedging #Gelber #markets #LNG #OPEC #oil #EIA #gas #gelber #WTI #Energy

Gelber Gas Daily (+ crude!) #NaturalGas -- EIA Reports +74 Bcf Injection Into Natural Gas Storage for Week Ended June 7th: NYMEX natural gas futures are down -$0.09, last trading at $2.95/MMBtu. The EIA’s Natural Gas Storage Report showed a 74 Bcf injection for the week ended June 7th, with the report also noting a revision to previous weeks of data from the Midwest. The updated data means that the May 31st injection has been corrected down from 98 Bcf to 96 Bcf; more importantly, however, the revisions left the total working gas in storage 7 Bcf higher than had been previously reported, from 2893 to 2900. As a result, though the latest 74 Bcf injection was in line with market expectations, the report overall had a bearish effect on price upon release. The latest injection of 74 Bcf brings total working gas in storage to 2974 Bcf. The surplus to the 5-year average is now at 573 Bcf, with storage 364 Bcf higher than this time last year. The US Senate confirmed two of President Biden's nominees for FERC yesterday, adding David Rosner and Lindsey See to the commission. A third nominee, Judy Chang, is expected to be confirmed on June 13, resulting in a 3-2 Democratic majority on the five-member commission through mid-2025. Rosner, See, and Chang bring diverse expertise to the commission, with backgrounds in energy policy, law, and climate solutions. The new members will address issues including LNG export policies, updates to the Natural Gas Act certificate policy, and grid reliability amid the transition to renewable energy sources. #Crude -- Crude Flat as Russia Commits to Further Cuts, Negotiations Underway in Middle East: Crude oil futures are flat on the day, with the front-month July contract last trading at $78.57/bbl. With the July contract set to settle next Thursday, rollover flows have begun to pick up pace. Russia pledged today to cut its crude oil production back by an additional 971,000 barrels per day, after noting its intention to more strictly follow the OPEC+ stated production targets for its member countries. Meanwhile, the conflict between Israel and Hamas is continuing, though ceasefire discussions are in motion. US Secretary of State Antony Blinken noted yesterday that Hamas had proposed numerous changes to a previous offer, though all parties remain committed to negotiation. #Oilandgas #Commodities #NYMEX #HenryHub #Trading #Hedging #Gelber #markets #LNG #OPEC #oil #EIA #gas #gelber #WTI #Energy #Biden #FERC #Rosner #See #Chang #Democrat #Republican #Blinken #Israel #Hamas #Russia

Gelber Gas Daily (+ crude!) #NaturalGas -- Venture Global Ordered to Produce Confidential Info in Dispute with Offtakers, MVP Looks to Begin Service: NYMEX natural gas futures are up $0.14, last trading at $3.05/MMBtu. We normally see a large drop in production on Tuesdays and today was no exception, with a -1.8 Bcf/d change bringing production to 97.8 Bcf/d. The drop was driven primarily by the Northeast. LNG remained somewhat stagnant at 12.8 Bcf/d. At Calcasieu Pass, offtakers including Shell and BP had previously claimed Venture Global delayed fulfilling contracts to sell LNG on the spot market at higher prices. Venture Global, which denies the allegations, has been exporting from the terminal for over two years but cites commissioning issues for the delays. FERC is now ordering that the company deliver confidential information regarding its commissioning to the terminal’s customers. FERC's order follows Venture Global's request for an extension to meet a service deadline, which the commission did not rule on and remains pending. Mountain Valley Pipeline (MVP) has notified FERC that the project is "mechanically complete" and requested authorization for service by today. Local groups and environmental advocates have raised safety and environmental concerns, urging FERC to postpone authorization although the project fulfills regulatory and safety requirements. MVP has finished all hydrostatic testing, welding, cleaning, and tie-ins, with the final segments now purged and packed with gas. Once operational, the pipeline is expected to significantly enhance gas supplies from the Appalachian Basin. Flows to the location have been minimal so far but may ramp up soon, as the developer stressed the market's demand for the pipeline, noting that multiple shippers are prepared to start transporting gas as soon as it goes into service. #Crude -- EIA Adjusts Crude Domestic Production Expectations Up, Price Down in Short-Term Energy Outlook: WTI crude oil futures are up $0.40, with the front-month July contract last trading at $78.14/bbl. The EIA’s Short-Term Energy Outlook saw a revision of the agency’s projected crude prices for 2024, down 4% to $84/bbl, with OPEC+ adjustments to production cuts cited as a driving factor. The agency also forecasts an annual average of 13.2 million barrels per day this year in domestic production led by the Permian Basin, with a 4% increase to that figure in 2025. Both the EIA and the IEA in Europe are calling for a 1.1 million barrel increase in demand growth this year, while OPEC’s estimate is double that, at 2.2 million. #Oilandgas #Commodities #NYMEX #HenryHub #Trading #Hedging #Gelber #markets #LNG #OPEC #oil #EIA #gas #gelber #WTI #Energy #STEO #Shell #FERC #BP #VentureGlobal #CalcasiuPass #MountainValleyPipeline

Gelber Gas Daily (+ crude!) #NaturalGas -- Natural Gas Ventures Above $3 On Healthy Demand, Freeport Sues Contractors Over Motor Defects: NYMEX natural gas futures are up $0.10, last trading at $3.02/MMBtu. Prices hit their highest since mid-January for the continuous front-month today, with the rest of the Summer ‘24 contracts seeing similar strength. A close above $3 would be highly bullish from a technical perspective. Demand is up from Friday’s numbers due to an uptick in Mexican exports and primarily from strength in ResComm, which broke above 10 Bcf/d for the first time since last month. A 2.2 Bcf/d change from yesterday brought the metric to 10.9 Bcf/d as the Lower 48 felt the impact of relatively cooler temperatures. That said, forecasts continue to call for above-normal temperatures later this week and through the end of June. LNG feedgas demand is mostly unchanged from Friday at 13 Bcf/d, with reduced inflows to several terminals offset by an increase at Cameron LNG. We had previously reported on Golden Pass’ lead contractor Zachry filing for bankruptcy; now, Freeport LNG is suing Zachry as well as Chiyoda, and McDermott over defects in electric motors at its terminal. The lawsuit cites an electrical short from loose hardware in Train 3’s motor as the direct cause of the outage, leading to further inspections and repairs across the facility. Freeport found similar issues in other motors and additional workmanship flaws in Train 2. The defects had caused extensive damage and prolonged outages from January to May, with the lawsuit filed in April. Flows to the terminal remain strong, with feedgas deliveries near full capacity this month so far. #Crude -- Crude Supported By Summer Demand Expectations, Offsetting Broad Macro Bearishness: Crude oil futures are up $1.80, last trading at $77.33/bbl. WTI futures are higher as expectations of summer demand are supportive of prices. This move is also influenced by OPEC's ongoing production cuts and growing global demand, particularly from non-OECD countries. Persistent inventory drawdowns and higher consumption are supporting this price increase, despite the broader macro landscape remaining less optimistic than weeks previous after the most recent jobs data indicating a strong labor market. Equity indices are mainly flat. The dollar is also strong, with the DXY index at a one-month high. This is partially due to weakness in the Euro, following news that French president Emmanuel Macron dissolved the country’s parliament and called for a snap election after his Renaissance party polled far below the rival National Rally party of Marine Le Pen. #Oilandgas #Commodities #NYMEX #HenryHub #Trading #Hedging #Gelber #markets #LNG #OPEC #oil #EIA #gas #gelber #WTI #Energy #MarineLePen #Macron #Freeport #Zachry #Chiyoda #McDermott