April 15, 2020

April 15, 2020
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  • WTI is down 38c to $19.73/Bbl, and Brent is down $1.10 to $28.50/Bbl
  • Oil fell under $20/Bbl as the International Energy Agency (IEA) said demand would slump by a record this year despite supply cuts (Blomberg)
    • Demand for oil will decline over 9 MMBbl/d this year, wiping out a decade of consumption growth, the IEA said
    • “We may see further downward pressure on prices in coming days and weeks,” IEA Executive Director Fatih Birol said
  • IEA World Oil Supply/Demand Key Forecasts:
    • Non-OPEC supply for 2020 was revised to 63.2 MMBbl/d from 67.1 MMBbl/d
    • Call on OPEC crude 2020 was revised to 22.1 MMBbl/d from 27.3 MMBbl/d
      • OPEC crude production in April rose by 2.62 MMBbl/d on the month to 31.2 MMBbl/d
    • Demand change is 2020 estimate -9.3% y/y or 9.4 MMBbl/d
  • Energy regulators in Texas debated Tuesday whether the state should impose 20% crude oil supply cuts on produciton to help support price
    • A 20% reduction from Texas would be about 1 MMBbl/d, as the state currently producing about 5 MMBbl/d
    • Parsley Energy and Pioneer Natural Resources led the argument in favor of requiring cutbacks during the 10 hour long TRC hearing
    • Opponents argued the free markets are working and Texas producers are rapidly cutting back
  • EIA weekly data is due at 9:30 AM CST
    • U.S. Crude Inventories:                  +     12,024 MBbls (Avg. Bloomberg surveys)
    • U.S. Gasoline Inventories:             +        7298 MBbls
    • U.S. Distillate Inventories:             +       2,034 MBbls
    • U.S. Refinery Utilization:               –     1.85% change
  • Natural gas is down 1.4c to $1.636/MMBtu
  • Korea Gas Corporation (Kogas) is in talks with term LNG suppliers to delay cargoes for delivery through October, according to Bloomberg
    • Kogas has asked Qatar, one of their primary suppliers, to delay as many as 18 cargoes over the next six months
    • AEGIS notes that forgoing cargo delivery through October could signal that global gas demand is not anticipated to return until late 4Q2020
    • It could also suggest that the global LNG market may be oversupplied until the end of 2020, keeping international prices low and further pressuring U.S. export margins
  • On Tuesday, gas deliveries to Freeport LNG dropped by 580 MMcf/d
    • Freeport LNG officials have declined to comment on how long the planned maintenance will last or which trains are affected
    • This planned outage comes at the same time as US’s first LNG shipment (loaded at Freeport LNG) to China in over a year nears arrival
    • Total feed gas demand continues to average above 8.0 Bcf

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