Market Update: Monday 26 October 2020 President Energy (AIM:PPC): Positive strides amid difficult climate IGAS Energy plc (AIM:IGAS): Partnership with Bayotech to produce hydrogen Mosman Oil & Gas* (AIM:MSMN): Significant additional interest acquired in the Cinnabar
Market Update: Monday 26 October 2020
President Energy (AIM:PPC): Positive strides amid difficult climate
IGAS Energy plc (AIM:IGAS): Partnership with Bayotech to produce hydrogen
Mosman Oil & Gas* (AIM:MSMN): Significant additional interest acquired in the Cinnabar Lease
Energy Prices
Brent Oil US$41.7/bbl vs US$40.7/bbl on Friday
WTI Oil US$39.4/bbl vs US$40.4bbl on Friday
Natural Gas US$2.99/mmbtu vs US$3.02/mmbtu on Friday
Oil Price News
US futures extended their downward trajectory from Friday in early trading today as New York futures have fallen to US$39/bbl
The chances of a deal on fiscal stimulus in the US looks slim as both sides accuse the other of moving the goalposts
Caseloads in the US were at record highs for the second day running
In Europe both Italy and Spain have moved to tighten restrictions while France continues to report record infections numbers
Traders viewing increasing caseloads as major determinant of weak gas demand, particularly in Western Europe and the US
Suggestions Brent Crude could remain around US$40/barrel until a COVID-19 vaccine is ready
Traders looking to OPEC+ next move, it is suggested the cartel will cut production by 5.7MMbopd in January, down from the initially agreed 7.7MMbopd
Putin’s pledged to support crude oil prices if the need arises restoring some confidence in the market
Libya’s National Oil Corp ended its forced majeure on exports from two key ports Ras Lanuf and Es Sider ports on Friday, the country expects production to return to 1m bpd in the next 4 weeks, far quicker than analysts expectations
Global coronavirus cases have now passed 40m, and a number of European countries have re-entered stricter lockdowns in a bid to slow the growing number of cases as we move into the Northern Hemisphere winter
The White House announced it is ‘cautiously optimistic’ that Speaker Pelosi may be edging closer to agreeing a deal on the new coronavirus bill
China’s Q3 economic GDP Growth came in below expectations at 4.9% YoY and 2.7% QoQ
The Joint Ministerial Monitoring Committee (JMMC) met on Sunday under the Chairmanship of the Saudi Minister of Energy
Production data for September 2020 showed overall conformity was 102% across OPEC and non-OPEC countries, the highest level since May 2020
The committee reiterated the commitments of all participating countries to achieve full conformity and to make up for shortfall under compensation plans
There was also emphasis on the ongoing positive contribution of the DoC in supporting rebalancing of the global oil market
Looking to out to next year the IMF said on Monday that they expect oil prices to stay in the US$40-50/bbl into next year, putting pressure on oil exporters in the Middle East
The IMF projects GDP in the region will fall 4.1% in 2020, with oil exporters in the Middle East and North Africa expected to suffer a 6.6% decline this year
Oversupply and an inventory glut remain concerns in the short to medium term with reduced air traffic volumes negatively effecting demand
The Aire Travel Association expects the global passenger traffic to return to pre-COVID levels by 2024, 12 months further out than initially thought
Short haul travel is expected to come back online faster, returning to levels resembling pre-pandemic footfall by 2023
Gas Price News
Natural gas futures prices retreated on Friday despite lower natural gas production and stronger export demand
These two factors are likely to be the forces that drive prices higher throughout the winter heating season, but not until the weather starts to cooperate
Increasing export demand and supportive government storage data should’ve underpinned prices, but a warmer turn in the latest weather forecast capped gains, encouraging bullish traders to trim their lofty long positions
Multiple reports were showing hints of warmer weather creeping up in some models, and on Friday, both the American and European datasets trimmed demand from the back of the 11-to-15-day outlook
Bespoke Weather Services said the models moved toward strong upper-level ridging anchored over the Midwest, suggesting that risks to the current forecast still were to the warmer side after the first couple of days of November
