Coquest Daily Energy Report

Crude Oil Futures for December 2022 settled up $1.84 @ $88.37/bbl. trading in a $3.53 range including the overnight-RBOB settled up 6.88/cpg and Heating Oil settled down 5.30/cpg. British Petroleum expects to pay around $2.5 billion in taxes for its British North Sea business this year, including some $800 million in a windfall tax, a spokesperson said on Tuesday. Last May, Britain in imposed the 25.0% Energy Profits Levy (EPL) on North Sea oil and gas producers to raise money to assist households struggling to pay their energy bills after global prices spiked in the wake of Russia’s invasion of Ukraine. The EPL, which brings total taxation on UK North Sea oil and gas production to 65.0%, includes incentives to increase spending in new oil and gas projects.

Natural Gas Futures for December 2022 settled down $0.641 @ $5.714/mmbtu trading in a 0.695 cent range including the overnight session. Energy Information Administration data currently shows that natural gas produced 38.0% of domestic electricity generation in 2022, up from 37.0% in calendar 2021, but current forecasts also show it to fall back to 36.0% in 2023. The data also shows coal-fired electricity generation to decline from 23.0% of the U.S. total last year to 20.0% in calendar 2022 and 19.0% in 2023. Growing generation from renewable sources limits growth in natural gas-fired generation, and coal’s generation share declines because of the expected retirement of some coal-fired capacity. The current forecast shows that wholesale electricity prices at major power trading hubs will be about 20-60% higher on average this winter.


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Disclosure: The risk of loss in trading futures and/or options is substantial. Past performance is not indicative of future results. The information in this message derived from third-party sources is believed to be accurate and reliable; Coquest does not guarantee the accuracy or completeness of the information. Opinions expressed in this material are subject to change without notice. This report should not be interpreted as a request to engage in any transaction of futures, options, and/or OTC derivatives. The information contained in this material is not to be relied upon in substitution for the exercise of your independent judgment. Seek independent financial, tax, legal, and accounting advice from your own professional advisers, based upon your particular circumstances.