The Pen is Mightier

Good morning, this is the Oil Patch. We're like Bounty — we're the quicker, picker-upper. Of oil and gas news.

Here's what the Oilman has for you today:

• The Pen is Mightier: Biden's Veto Pen, That Is

• Natural Gas Futures Ignite: Colder Weather and Delayed Plants Heat up the Market

• Russia's Oil Exports Take a Dive: Putin's Revenues Hit Rock Bottom

• Tweet of the Day

The Pen Is Mightier: Biden's Veto Pen, That Is

Looks like House Republicans have a new enemy on the horizon:

President Biden's veto pen.

According to Energy Secretary Jennifer Granholm, the President will not hesitate to strike down the Strategic Petroleum Reserve bill if it passes Congress.

Granholm warns that limiting the President's authority to tap into the nation's oil reserves would be a disaster for national security and lead to crude oil shortages and higher gasoline prices.

But don't worry, dear American people. Biden is on the case, ready to save the day by preventing this backward agenda from becoming a reality!

Biden has already shown his willingness to tap into the SPR in times of crisis, and he's not about to let a little bill stand in his way.

So, House Republicans, you've been warned:

Beware the power of the veto pen.

Natural Gas Futures Ignite: Colder Weather and Delayed Plants Heat up the Market

Looks like the natural gas market is heating up, no pun intended.

Despite the fact that many experts believe the United States has more than enough gas in storage for the rest of the winter, and the ongoing delays at Freeport LNG's export plant in Texas, natural gas futures jumped about 7% on Monday.

But why the sudden spike in prices?

Oh, just a little thing called colder weather and higher heating demand.

Who would have thought that people would need more heat during the winter?

The market is also keeping a close eye on Freeport LNG's export plant, which has been shut down since June due to a fire. The company has repeatedly stated that the plant is on track to restart in the second half of January, pending regulatory approvals.

But let's be real, with the multiple delays and the large amount of work needed to satisfy federal regulators, we're not holding our breath for a January restart.

The facility, when operating at full power, can pull in around 2.1 billion cubic feet per day of gas and turn it into LNG.

That's about 2% of U.S. daily production, so you can see why the market is so interested in its return.

The uncertainty surrounding the restart date is keeping traders on their toes, but one thing is for sure, prices will likely jump once it returns to service and demand for gas rises.

In the meantime, gas speculators have boosted their net short futures and options positions on the New York Mercantile and Intercontinental Exchanges to the most since March 2020, according to the U.S. Commodity Futures Trading Commission’s Commitments of Traders report.

And shares outstanding in the U.S. Natural Gas Fund, an exchange-traded fund (ETF) designed to track the daily price movement of gas, hit 55.2 million on Friday, its fourth record high in a row, according to Refinitiv data.

So, it looks like the market is preparing for a cold and uncertain winter.

And some interesting NatGas prices as well...

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Russia's Oil Exports Take a Dive: Putin's Revenues Hit Rock Bottom

Russia's oil export game just hit a major speed bump.

According to tanker tracking data, Russian crude oil shipments from its key export terminals dropped by a whopping 22%, or 820,000 barrels per day, last week.

Ouch.

But wait, it gets worse.

A change in the per-barrel crude export duty due to the plunge in the price of Urals, Russia's flagship crude grade, and the lower volumes exported last week, likely shrank Putin's weekly crude oil revenues to the lowest since the Russian invasion of Ukraine.

And if that wasn't bad enough, things are looking even bleaker for February.

The per-barrel export duty is expected to be even lower as the price of Urals continues to be well below the G7 price cap of $60 per barrel.

To add insult to injury, EU bans will take effect on February 5th, which will ban seaborne imports of Russian refined oil products, leaving around 1 million bpd of Russian diesel, naphtha, and other fuels to find a new home if Moscow wants to continue getting money for those products.

Russia's oil exports have been taking a hit in recent weeks, with estimates showing a decline in revenues.

The EU oil ban and price cap are costing Russia an estimated $174 million per day due to the fall in shipment volumes and prices for Russian oil, as stated by the Finland-based Centre for Research on Energy and Clean Air (CREA).

Looks like Putin might have to start thinking about a new source of income.

Tweet of the Day

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