April 1, 2020

April 1, 2020
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  • WTI is down 16c to $20.32/Bbl, and Brent is down $1.13 to $25.22/Bbl
  • Saudi Arabia is continuing to ramp up its oil production, increasing output capacity and booking new tankers in its price war with Russia (Bloomberg)
    • The Kingdom is now producing above 12 MMBbl/d, about 2 MMBbl/d more than a month ago, according to Saudi officials
    • The record loss of demand, due to the coronavirus outbreak, has posed a problem for all the new Saudi oil. “There are loadings [from Saudi ports] with no destination on them because we don’t have buyers,’ a Saudi official said
  • The American Petroleum Institute (API) showed a huge crude oil inventory build of 10.4 MMBbl for the week ending March 28
    • The Tuesday afternoon API release sent crude prices lower, but traders typically pay more attention to the government’s data release later this morning
  • EIA weekly data is due at 9:30 AM CST
    • U.S. Crude Inventories:                  +     3,920 MBbls (Avg. Bloomberg surveys)
    • U.S. Gasoline Inventories:             +      1,086 MBbls
    • U.S. Distillate Inventories:             +         316 MBbls
    • U.S. Refinery Utilization:               –     1.33% change
  • Natural gas is up 0.8c to $1.648/MMBtu
  • Diamondback announced it will maintain the $1.2 Billion in capital expenditure cuts it made on March 19, but is willing to make further cuts should commodity prices remain weak
    • The company is anticipating on exiting 3Q2020 running eight rigs and exiting 2020 running seven
    • Range Resources is cutting capital expenditures by an additional 17% to total $430 million
  • Chinese LNG buyers have become some of the most active in the market over the last two weeks, according to Bloomberg
    • The increase in demand has reportedly come mainly from smaller utilities trying to take advantage of cheap prices as industrial activity starts to rebound
    • Despite the uptick in demand, the JKM benchmark continues to slide further into all-time lows
  • Production forecasts from Enverus have dry gas production falling by over 6 Bcf/d by December 2020, compared to 2019

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