Daily Standup Top Stories
Traders Become More Bullish on European Diesel as Winter Arrives
Hedge funds and portfolio managers are reducing their short positions on European diesel futures. Rising natural gas prices and colder weather are boosting demand for diesel and gasoil. Traders are becoming more bullish on diesel […]
U.S. Enters Winter with Highest Natural Gas Stocks in Eight Years
U.S. natural gas inventories are higher than average for this time of the year as America has entered the proper winter heating season with stocks at their highest level since 2016, the Energy Information Administration […]
Highlights of the Podcast
00:00 – Intro
00:49 – Traders Become More Bullish on European Diesel as Winter Arrives
03:16 – U.S. Enters Winter with Highest Natural Gas Stocks in Eight Years
06:54 – Markets Update
08:42 – Rig Counts Update
09:11 – Outro
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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Michael Tanner: [00:00:10] What’s going on, everybody? Welcome into the Tuesday, December 3rd, 2024, edition of the Daily Energy News. Beat Stand up. Here are today’s top headlines. First up, traders become more bullish on European diesel as winter arrives. Sticking with the natural gas, the U.S. enters winter with highest natural gas stocks in eight years. I will then jump over and quickly cover what happened in the oil and gas markets today, mainly covering the interesting stuff coming out of China and the Fed. And then we’ll also slightly touch on rig counts. Stu is out on assignment today, so I am rocking a solo show. [00:00:48][38.5]
[00:00:49] Let’s go ahead and kick this off. All right. Traders become more bullish on European diesel as winter arrives. I’ll read you the top three bullet points here from the article. Hedge fund and portfolio managers have net reduced their short positions on European diesel, specifically on the futures side. The main reason for that was rising natural gas prices and some expected cooler weather coming in. There are boosting the demand. Overall, both diesel and gasoline and traders have become more bullish on these diesel futures due to those factors. Guys, a couple of underlying nobles on the ice. Gasoline futures, which is basically ice, is their version of nine max. Speculators raise their net long positions or what we would call bullish bets by 3400 lots to 23,239 lot. That’s the week of November 26th, according to the weekly report. There are actually similar reports coming out of the CFTC, which the Commodity Futures Trading Commission here in the United States. They release a weekly report called The Commitment of Traders that comes out and it’s delayed. We actually will hear that at some point today as we record this late Monday. But the same thing is most likely happening in the United States. On the decline in shorts Last week actually marked the fourth consecutive week which in Europe traders cut a lot of their short bets. This four week run of speculators actually cutting their net shorts was actually the longest such streak since February. That’s according to Bloomberg. And now that we’re seeing a lot more colder weather roll into the the region, it’s definitely, definitely a bullish sign. I think you’re seeing that specifically in the Henry Hub price. You’re also seeing that specifically going on in Europe. So no surprise that these hedge funds are switching. I think you’re seeing a lot of the kind of seasonal natural gas swing generally happen. It will be very interesting to see how much and you know, this is straight from the article here, The rise in natural gas price could also incentivize some gas to oil switching. So gasoline futures were also pushed up and trader sentiment has become more bullish over the past few weeks. Pretty interesting. And the fact that there’s still some oil fired plants over there. So could definitely be interesting there. Europe, I think, is in for a very interesting treat this this winter as, again, Russian gas supply gets cut off. There are some interesting things going on. Will the United States be able to export and fulfill that gas demand? It remains to be seen. Speaking of the United States, gasoline and natural gas stocks,. [00:03:15][146.4]
Michael Tanner: [00:03:16] Here’s the next article. U.S. Enters Winter with Highest Natural gas Stocks in eight Years. This is great news if you’re if you’re part of the lower 48 here, that working natural gas storage in the lower 48 has ended or has ended its season at 3.9 to 2,000,000,000 cubic feet of gas in its reserves, which is the highest natural gas inventories that we’ve had since 2016. That’s according to our friends at the e. I a. We’ve, you know, as we know, we inject gas during the winter and or during the summer and we draw during the winter. So we’ve ended injection season and have entered now a withdrawal season, which is great considering the fact that we have our working natural gas storage at 6% above the five year average. And this ironically comes on the back of lower than average injections into storage through the entire injection season, which basically runs April 1st through October 31st. It’s pretty much I mean, the reasoning they’re saying is that we had a lot to begin with that is up in dispute a little bit, mainly if you look at the underlying data, But stocks were about 25 times higher than they normally were or 25% higher than they normally were, but they were up 40% than the five year average in March. So there’s a little bit of a conflicting data there that a lot of what they’re saying is the reason why stocks were so high to begin injection season was the fact that we had a lot of excess natural gas. Again, some conflicting data coming out there relative to that because of this data. We actually was part of the reason we saw the Henry Hub price, which we’ll cover in a bit, actually drop about two percentage points today, mainly due to the fact that, now all of a sudden we’ve got all this gas. This is great if you’re a consumer, this is good because this means your heating price won’t go through the roof this winter. And hey, it’s the reason why we need to make the United States energy independent. Yet we have enough natural gas here to drive our. Hire inventory and drive our entire inventory of natural gas and heating supply. So I’m glad we’re doing this. Definitely, definitely necessary. And you know, for once, it’s working out. We love a good natural gas play here, you know, But again, what Trump is going to ease regulations and I think where the regulations are onerous is on the LNG sub. So the spread between both of these is we have all this excess natural gas. If we can get new LNG export terminals permitted, we’ll be able to take that natural gas and fulfill the supply that needs to go on. And you know, that’s going to help our prices here going to rise. Natural gas prices here help our producers. It may hurt consumers, but we’ll we can talk about that from different spreads. But it’s going to allow Europe to not pay exorbitant costs for energy. So the funny part is releasing and allowing more permitting and allowing more LNG export producers actually raises energy prices here because the arbitrage between here and Europe is interesting. So I’ll I will be curious on what Trump does from that standpoint. He’s not going to outlaw LNG export terminals, but I do think that’s a weird cause and effect. So we will be definitely watching that. [00:06:12][175.7]
Michael Tanner: [00:06:12] Let’s jump over and quickly finish with finance and breakouts Before we do that, guys, as always, I got to pay the bills here. Thank you for checking us out here on the world’s greatest website, the energy news beat.com all the news and quote unquote analysis you’re hearing is brought to you by said websites. Do in the team do a tremendous job making sure it stays up to speed. Everything you need to know to be the tip of the spear when it comes to the energy and the oil and gas business. Go ahead and hit that description below. All the links to the timestamps. Links to the articles. Subscribe to us on substack. The energy news beats out substack. And if you have a tax problem in 2024, please, please, please, please invest in oil energy. Use Bitcoin for all your information and how to lower your tax burden, diversify your portfolio, make a little bit of dividends, and finally become Billy Bob Thornton from Land Men. [00:06:54][41.6]
Michael Tanner: [00:06:54] We’ll look at top line numbers here. S&P 500 has up about a 2/10 of a percentage point. Nasdaq jumped all the way, 1.1 percentage points, reached all time high today, just above 21,600 for 160 for ten year yields, up a 10th of a percentage point. Personally, two year yields were up a 10th of a percentage point. Ten year yields were basically up, just a blip dollar index up a half a percentage point. Bitcoin 95,000. It was down about one percentage points day over day. Crude oil basically flat 6811. We opened at $60, $68 last night. So things are relatively flat there. Brant Oil is actually down about 3/10 of a percentage point 7212. And we did see natural gas fall about four percentage points to $3 in 19 said and our actual PE contract shed about 1.1 percentage points to 143 88. You know, I mean, yes, oil’s a little bit steady. We did see about a 1% rise early in the session. We saw things sort of fall off the table a little bit. We did see strong demand in from theoretically China come in off some higher factory activity that drop. But we also did basically hear that the US that the Fed is not going to cut interest rates at its December meeting, which is a little bit different than I think what people were expecting. You know, it basically it’s very interesting. We saw the Atlanta Fed Reserve president Raphael Bostic said he has an open mind about whether to cut interest rates again at the Fed meeting with upcoming jobs data help shape his decision. But again, with that not being cut, we’re also again waiting OPEC’s plus decision as they’ve delayed and postponed their meeting to December 5th. Most likely they’re going to do again. They’re going to delay an oil increase that was supposed to start January. That’s according to OPEC sources. So I think that, you know, again, any delay or an infinite delay will help cure some of those long term prices. [00:08:41][107.0][148.6]
Michael Tanner: [00:08:42] We did see rig counts on Friday. One rig shed in the U.S. week over week count sitting at 582 internationally. And we saw three rigs get added at 9 to 950. And in Canada, we saw four rigs up to 205. This is about output shed, about 43 rigs year over year. So we’re starting to kind of squeeze that number from last year. But all in all, pretty quiet on the oil and gas finance front. We saw a lot of M&A last year around this time. Will we see it this year? Who knows? But we will keep you up to speed with all of that. Guys. [00:09:11][29.0]
Michael Tanner: [00:09:11] With that, I’m going to let you get out of here on this quick episode, Get back to work. Appreciate you guys checking us out here on the World’s greatest podcast for Stuart Turley. I’m Michael Tanner. We’ll see you tomorrow, folks. [00:09:11][0.0][538.7]
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