Market Insights > First Look

First Look - WTI reaches a three month high | Natural gas gains 32c

Oil extends gains from last week, with prompt WTI above $7/Bbl
- WTI is trading at the highest level in three months
- The US dollar is sharply lower this morning, supporting commodity prices
Biden administration bans oil exploration in US Atlantic and Pacific (BBG)
- President Biden has indefinitely blocked oil and gas development in 625 million acres of US coastal waters
- This move could be difficult for incoming president Donald Trump to unwind as it is rooted in a 72-year-old federal law that allows presidents to withdraw US waters from oil and gas leasing
- The regions blocked from exploration include the US East and West Coasts. The eastern Gulf of Mexico, and a small part of the Northern Bering Sea
- Some of the areas included were withdrawn from leasing during the last Trump administration but only until 2032, whereas the move by Biden is intended to be permanent
Saudi Arabia boosts selling price to Asia more than forecast (BBG)
- Saudi Arabia has raised its official selling price to Asia for next month by 60c compared to an expectation of 10c
- This could be a sign that Saudi Aramco sees tighter supply in its largest market ater recently delaying plans to restore production

Prompt natural gas gained 34c to $3.69/MMBtu (8:10 CT) Monday morning, reversing the 31c loss observed on Friday
- The two-week weather forecast is supportive for the bulls, with plenty of below-average temperatures expected
- Natural gas weighted heating degree days (HDDs) are forecast to amount to 990 for January, according to CWG
  - If correct, January would be a full hundred HDDs cooler than the 10-yr average
A winter storm brings fridged temperatures across the central and east US
- Modeled lower 48 gas production is slightly down as low temps induce “freeze offs”
  - Supply sits at 103.4 Bcf/d, according to S&P data
- On the demand side, LNG feed gas nominations set a new record at 15.45 Bcf/d (Criterion)
  - Estimates for flows into Cheniere’s Corpus Christi facility show the new stage 3 starting up
  - Venture Global’s Plaquemines LNG was measured as consuming nearly 700 MMcf/d
- AEGIS notes that while the weather forecast may not be cold enough for massive supply freeze-offs, the duration of the cooler-than-normal temperatures is still well supportive for healthy inventory draws