- 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
