Coquest Daily Energy Report

Crude Oil Futures for February 2022 settled up $2.51 @ $71.12/bbl trading in a $2.94 range including the overnight-RBOB settled up 6.22/cpg and Heating Oil settled up 8.48/cpg.  According to leading market advisors, “energy traders do not want to bet against OPEC+ but all the short-term risks from Omicron to Fed tightening are proving to be very disruptive to the short-term outlook for oil prices. The virus spread across Europe is delivering a bigger hit than expected and when you calculate family gatherings for the holidays, the short-term outlook could get slashed over the next month”. While most market participants still view these as short-term concerns, others expect the 2022 outlook to be materially affected. Specifically, the International Energy Agency has summarized that coming out of Q4 21 and Q1 22 we should be looking at a material surplus.

Natural Gas Futures for January 2022 settled up $0.035 @ $3.869/mmbtu trading in a .228 cent range including the overnight session. Profits per customer declined for regulated gas pipeline businesses over the seven years, according to analysis by the Commerce Commission. Detailed in a new Commission report, the average profit per customer for local gas pipeline businesses was $111.00 in 2020, $79.00 less than the average profit per customer in 2014. “The reduction in profits per customer was a result of the lower rate of return that gas pipeline businesses were allowed to earn when we last set gas price-quality paths in 2017. Our analysis shows that gas pipeline businesses have not made excessive profits over the last seven years.” Deputy Chair Sue Begg said. According to the data, capital expenditure regarding gas transmission pipelines was up +61.0% over the same time frame.


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