Bullboard - Stock Discussion Forum Athabasca Oil Corp T.ATH

Alternate Symbol(s): ATHOF

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Athabasca Oil Corporation (AOC) is a Canadian energy company with a focused strategy on the development of thermal and light oil assets. AOC’s segments include Light Oil and Thermal Oil. The Thermal Oil segment includes the Company’s assets, liabilities and operating results for the exploration, development and production of bitumen from sand and carbonate rock formations located in the... see more

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Athabasca Oil Corp > RBC Notes

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Post by retiredcf on Nov 22, 2024 8:08am

RBC Notes

November 21, 2024

US Natural Gas: The Peak is In
11/21/24 Weekly Storage Withdrawal Bullish to Expectations

Our view: This week's report likely marks the pivot into the withdrawal season, which puts the peak storage at 3.97 Tcf or 220 Bcf above the 10-year average. Natural gas prices and equities continue to rally. A cold front is expected to blanket most of the US now through next week and there is sustained progress with LNG feedgas deliveries. Gas focused producers are up 20% MTD on the back of momentum generated from recent political appointments and the gas price surge. Today’s weekly storage inventory data point is slightly bullish versus expectations for a 3 Bcf withdrawal, compared to the 1 Bcf injection consensus median expectation. The withdrawal was below the 5-year average withdrawal of 16 Bcf and last year’s same-week injection of 12 Bcf. We think next week's report could produce a 5-10 Bcf withdrawal, compared to the 20-30 Bcf seasonal normal level.

Weekly EIA Storage Recap

• The EIA reported a weekly US storage withdrawal of 3 Bcf, slightly bullish to consensus expectations. The consensus median injection was 1 Bcf (average injection of 2 Bcf; range of (3)-10 Bcf). The withdrawal compares to last year’s same-week injection of 12 Bcf and the 5-year average withdrawal of 16 Bcf.

• Total working storage is now at 3,969 Bcf, 141 Bcf above last year’s 3,828 Bcf and 239 Bcf above than the 5-year average of 3,730 Bcf.

RBC Outlook

• Fall storage peak now nearing 3.97 Tcf, which was 225 Bcf above the 10-year average. Our early assessment for the winter trough that generally occurs around the end of March is 1.9 Tcf, which is 350 Bcf below last year but 145 Bcf above the 10-year average.

• The 12-month natural gas futures are $3.24/Mcf, up $0.16/Mcf from last week. This is above RBC’s current next-12-months $3.01/Mcf forecast. The longer-dated futures average is $3.54/Mcf (2024-2027), up $0.12/Mcf from last week.

Macro Points

• Weekly Rig Trends. The US gas directed rig count decreased by 1 rig to 101 rigs in last Friday’s weekly report. The Appalachian rig count increased by 1 to 35 rigs and is down 4 from last year. Haynesville rig count remained unchanged at 32 rigs and is down 6 rigs from a year ago.

LNGHappenings.TCEnergy(TRP)recentlysignedacommercialagreementwithLNGCanadatosupply natural gas through its 2.0 Bcf/d Coastal GasLink pipeline. LNG Canada expects first cargos to be shipped by mid-2025.
Pipeline Updates. (1) DT Midstream (DTM) acquired three US Midwest pipelines from Oneok (OKE) for $1.2 billion. The systems include Guardian Pipeline, LLC, Midwestern Gas Transmission Co., and Viking Gas Transmission, Co. The transaction is expected to close late 2024/early 2025. (2) TC Energy (TRP) recently approved its Pulaski and Maysville projects, which are part of the Columbia Gulf System, for coal-to-gas conversion. Each project provides 200 MMcf/d of new capacity with a target in-service date of 2029.

Natural Gas Equities

• Natural gas equities are up 31% YTD, leading oil-focused equities, which are up 4%. Natural gas stocks currently reflect $3.50/Mcf, just below the 5-year strip ($3.56/Mcf).