The Arctic Circle of Life. The Energy Report 12/30/2024

Oil prices are boring compared to natural gas that is getting snapped out of its stupor on an Artic weather event.

Natural Gas prices are soaring around the world as we are facing what could be a long cold winter.

Natural gas prices in the US spiked over 10% overnight as winter forecast locked in decidedly colder.

Bearish natural gas narratives are going to be tested as some forecasters say could be the coldest January in 30 years and the most sustained cold in a couple of years.

Celsius Energy predicts that the coming cold snap will impact not only the Lower 48 but also Europe. This could be some of the most sustained cold snaps since 2022. European Natural gas storage is already down -500 BCF vs last year. Bullish for LNG.

The European natural gas storage deficit versus last year now stands at an impressive -512 BCF or -15%. This is poised to rise even further over the next 2 weeks as colder-than-normal temperatures also overspread Europe.

Investing reports that in Europe natural gas prices have been nearing their highest levels for the month due to a faster-than-normal depletion of storage levels and the impending end of the gas transit agreement between Ukraine and Russia.

If these frigid forecasts are correct, we should see record breaking demand and the possibility of freeze offs that could cut natural gas production. The trade that was worried about a glut could be taking about   tightness with supply. We also could see the economy face some challenges.

We are going to test the infrastructure unlike anything we’ve seen in a couple of years.

We’ll see how well the electricity and power grid hold up, it’s more than likely there will be at least some problems.

This is one of the reasons why last week we were talking about buying some out of the money natural gas calls if you did buy multiple contracts you may want to take a few off on this first surge but there is a possibility that these options could go dramatically higher over the next couple of weeks.

In the oil market there’s more signs that inventories are tightening, and demand is better than expected the markets still disappointed with our more clarity from Chinese stimulation but with the cold weather coming in and supplies being tight one would imagine that the price of oil doesn’t have too far to fall. to break out to the upside to make a move to the upper 70s we need to see a close above $71 today.

The diesel crack spread is reacting to the cold temperature with a big spike.

S&P global reported that North America dropped 71 rigs week on week, Baker Hughes’ final North America rotary rig count of 2024, which was released on December 27, showed.

Although the total U.S. rig count remained unchanged week on week, Canada’s total rig count decreased by 71 during the same timeframe, taking the total North America rotary rig count down to 684, comprising 589 rigs from the U.S. and 95 rigs from Canada, the count outlined.

Of the total U.S. rig count of 589, 573 rigs are categorized as land rigs, 14 are categorized as offshore rigs, and two are categorized as inland water rigs. The total U.S. rig count is made up of 483 oil rigs, 102 gas rigs, and four miscellaneous rigs, according to the count, which revealed that the U.S. total comprises 527 horizontal rigs, 49 directional rigs, and 13 vertical rigs.

The cold weather, if the forecast hold up could have a major impact on the economy anything from heating oil to natural gas prices to the electric grid and to businesses could all be impacted by this cold,

That’s one of the reasons why you must download the Fox Weather app today. Also stay tuned to the Fox Business Network

Also open your account today my number is 888-264-5665 or you can e-mail me at pflynn@pricegroup.com

Thanks,