Market Analysis
Weather
- North West Europe: Cold weather still prevailing, however, the weather is around the seasonal upper limit.
- South West Europe: Mild weather with the same outlook for next week.
- South America: Still warm with warmer weather outlook.
- Middle East: Mild weather prevailing in the Middle East.
- South Asia: Winter in full swing in India, Pakistan, and Bangladesh.
- North East Asia: Extreme cold weather for China, Japan & South Korea, whereas Taiwan still warm.
- South East Asia: Warm weather still prevailing.
- North America: Mexico in mild to warm weather, whereas cold weather prevailed last week in US with exception of South West and South East, warmer outlook for East and West for next week.
Crude Oil
- Crude oil had a bullish run in the first week of 2018 based upon news on protests in Iran, Geo political tension with North Korea and significant inventory draw down data from US despite resumption of supplies from Forties and Libya.
- Brent prices closed on $67.62/BBL on Friday, while WTI closed at $61.44/BBL.
- Future market closure on Friday for Brent front month (March 2018) at $68.07/BBL, whereas WTI front month at $61.59/BBL, still depicting supply demand balance.
- Brent and WTI future still in backwardation in long-term basis, which is depicting oversupply sentiments.
- Baker Hughes oil-rig count reported decrease by 5 and number stayed at 742.
- Brent-WTI spread still healthy and closed at closed at $6.20/BBL on Friday.
- US crude Production, Export & Inventory data;
Million Barrels (MBbl) | 29-Dec-17 | 22-Dec-17 | 15-Dec-17 | 8-Dec-17 |
Production (MBbl/D) | 9.782 | 9.754 | 9.789 | 9.780 |
Exports (MBbl/D) | 1.475 | 1.210 | 1.858 | 1.086 |
Crude Inventory | 424.5 | 431.9 | 436.5 | 443.0 |
Gasoline Inventory | 233.2 | 228.4 | 227.8 | 226.5 |
- EIA Weekly report reported 7.4 million barrels draw down with stock at 425.4 million barrels on 29th December 2017, against a market expectation of 5.15 million barrels draw down.
- Gasoline inventories at 233.2 million barrels reported on 29th December 2017, 4.8 million barrels build up against a market expectation of 2.2 million barrels buildup.
Natural Gas
- Henry Hub prices started bullish due to severe cold weather outlook till Wednesday and then eased of on warmer weather outlook in East and West regions along with smaller than expected inventory drawn down.
- Baker Hughes reported decease in gas rigs by 2 since 24th December 2017 and total number stands at 182.
- EIA reported working gas in storage is 3,126 BCF as of Friday, 5th January 2018, net decrease of 206 BCF, with market expectation of 210 BCF decline.
- CME Henry Hub future on Friday closed at $2.795/MMBTU for February, $2.745/MMBTU for March and $2.650/MMBTU for April, overall bearish outlook on weather-based demand.
- North West European gas hub remained bearish due to warmer weather outlook, adequate inventory level at Gas storage & LNG terminal and regular flow from Norway.
- As per GASCO data, pipeline gas flow reduced for Germany & UK for a day or so due to minor issues at Kvitebjorn and Oseberg, whereas Valemon condensate reduction issue resolved, average flows are given below;
One standard size Vessel of 150,000 m3 equals to 3.42 BCF. LNG merchant data is developed in collaboration with Clipper Data LLC, due to Thanks Giving holidays, 24th November data will be shared with next week report) W-Country- within same country delivery & TBC – To Be Communicated Disclaimer: This is a personal analysis based on public information and should not be used for buying and selling of commodities. Source: SGX LNG Index Group, EIA, GIE, and Reuters.BCFD Germany France Belgium UK 23rd – 29th December 2017 3.80 1.80 1.53 4.80 30th December – 4th January 2018 3.78 1.78 1.55 4.76 Weekly European Gas and LNG quantities at Storage and LNG terminals (BCF)
Quantity in BCF 5-Jan-2018 29-Dec-17 22-Dec-17 15-Dec-17 Belgium Gas 12.47 13.00 14.15 17.40 LNG 1.38 2.18 2.67 3.15 Total 13.85 15.18 16.83 20.55 Capacity Utilization 36% 39% 44% 53% France Gas 229.81 238.07 248.43 263.04 LNG 19.39 17.19 18.09 16.60 Total 249.19 255.25 266.53 279.64 Capacity Utilization 51% 52% 55% 57% Germany Gas 518.29 528.60 542.79 581.66 LNG – – – – Total 518.29 528.60 542.79 581.66 Capacity Utilization 65% 67% 68% 73% Greece Gas – – – – LNG 2.59 1.74 1.36 2.68 Total 2.59 1.74 1.36 2.68 Capacity Utilization 96% 65% 51% 100% Italy Gas 472.50 490.17 506.20 530.59 LNG 6.56 1.56 3.53 3.85 Total 479.06 491.73 509.73 534.44 Capacity Utilization 72% 74% 76% 80% Lithuania Gas – – – – LNG 2.79 2.93 3.09 2.11 Total 2.79 2.93 3.09 2.11 Capacity Utilization 81% 85% 90% 61% Netherlands Gas 276.97 287.84 302.31 324.31 LNG 4.54 4.69 5.49 5.64 Total 281.52 292.53 307.80 329.94 Capacity Utilization 62% 64% 68% 73% Poland Gas 86.59 88.47 89.52 93.55 LNG 2.50 3.85 4.90 1.58 Total 89.09 92.32 94.42 95.13 Capacity Utilization 74% 77% 79% 79% Portugal Gas 6.94 6.41 5.50 5.98 LNG 6.87 2.13 3.46 2.98 Total 13.81 8.54 8.96 8.95 Capacity Utilization 68% 42% 44% 44% Spain Gas 75.36 75.44 75.58 76.77 LNG 32.12 29.64 30.29 30.86 Total 107.48 105.08 105.87 107.63 Capacity Utilization 61% 60% 60% 61% UK Gas 27.37 20.00 12.84 15.86 LNG 25.75 29.87 25.88 27.62 Total 53.12 49.88 38.72 43.48 Capacity Utilization 79% 74% 58% 65%
LNG Price Assessment and Natural Gas 11th – 22nd December 2017 LNG Analysis
Author’s Comments
LNG Trade Flows (30th December 2017 – 5th January 2018)
SUPPLY – TRADE FLOWS
DEMAND – TRADE FLOWS