Supply congestion affects oil, natural gas prices

Despite rising oil prices and a strengthening dollar, commodity prices fell by about 1 percent on Friday, but a strong week was observed.

West Texas Intermediate rose three of its five trading days, including Wednesday, by $ 2.15, to close at $ 71.97 a barrel on Thursday before falling 64 cents on Friday. Prices increased by more than 3 percent for the week.

Natural gas prices at NMXX rose by more than $ 5 a month, up 29 cents on Monday and remained there all week, with even a fall of 23 cents on Friday closing at $ 5.10 per barrel.

Javier Loya, chairman and co-founder of OTT Global Holdings, the world’s largest free trade broker, told The Telegram in a telephone interview.

For his part, OBC Global Vice President and Chief Data Analyst, Campbell Folkner, said that there is a significant decline in U.S. exports and that it is supporting inflation as it does not add large quantities of new products.

“This seems to be more of a split in supply,” he said. “We do not have the same ocean as we did three years ago. Prices are not $ 110 but not $ 10. Manufacturers are in a sweet spot where they can enjoy it reasonably well. Filtered products are removed, but not difficult. ”

Operators are busy clearing their balance sheets and are reluctant to invest in further digging, Faulner added. He said they are waiting to see if they have the cash flow to support the excavation and that prices could increase activity if the barrel reaches $ 80 or $ 90.

It expects prices to fluctuate between $ 65 and $ 80 to bring the ocean to the market with reasonable demand and to the Organization of Petroleum Exporting Countries and its partners, or even North America. .

Loya says she has never seen a $ 100 merchant. Despite the short-term turmoil until the interest side of the puzzle is clear, we are not looking at the volume of the transaction as a natural gas.

Natural gas supply issues can send up to $ 10 per share, Loya said. Even in Europe, natural gas reserves are less than five years old, he explained. And any event, like Ida and Nicholas, which disrupt natural gas production, is enough to speed up the market.

“We can’t get enough storage for the winter,” Loya said. It will average $ 3.70 per McF in 2022.

“It takes a while for us to get comfortable with the balance,” he said. You’d better get $ 3 + for a while.

Folkner noted that natural gas is moving mainly from domestic to international exports, pointing to an increase in exports to Mexico and efforts to export US natural gas to Europe and Asia. That is putting pressure on the domestic market, he said.

Higher prices are re-attracting dry gas-based pools such as Haisville, and manufacturers such as Chesapeake Energy are expanding the game. Apache Corp., a major trading partner in the Permian Basin, said it would eventually pay off if its demand for dry natural gas remained strong.

Folkner then added that because of the limited capacity of Mexico or Corpus Christi or Houston, manufacturers could enter a closed gas issue.

Loya summed up, “It will be a happy fourth quarter and winter.”

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