Coquest Daily Energy Report
Crude Oil Futures for November 2022 settled up $4.14 @ $83.63/bbl. trading in a $3.69 range including the overnight-RBOB settled up 14.31/cpg and Heating Oil settled up 14.75/cpg. Opec and their working allies could be planning a substantial cut in production to prop up falling prices, according to people close to the situation. The oil group is expected to discuss a production cut that could total more than 1million barrels per day at the scheduled meeting on Wednesday. This is by far the largest cut since early during the coronavirus pandemic and equivalent to more than 1.0% of global supplies. Russia is also said to be in favor of a production cut as its oil revenues have declined in recent months, with buyers forcing large discounts on its supplies following Moscow’s full-scale invasion of Ukraine. The recent strength of the Ruble has also reduced the amount it receives in its domestic currency for oil deals sales primarily priced in dollars.
Natural Gas Futures for November 2022 settled down $0.296 @ $6.470/mmbtu trading in a 0.524 cent range including the overnight session. The Paris based International Energy Agency said in its quarterly gas report released Monday that European Union countries would need to reduce usage by -13.0% over the winter in case of a complete Russian cutoff amid the war in Ukraine. Much of that cutback would have to come from consumer behavior such as turning down thermostats by -1.0 degree and adjusting boiler temperatures as well as industrial and utility conservation, the group said. Currently, there is very little of Russian gas still arriving in pipelines through Ukraine to Slovakia and across the Black Sea through Turkey to Bulgaria. The EU on Friday agreed to mandate a reduction in electricity consumption by at least 5% during peak hours.
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