April 16, 2020

April 16, 2020
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  • WTI is up 2c to $20.13/Bbl, and Brent is down 94c to $28.66/Bbl
  • West Texas Intermediate moved back above $20/Bbl on Thursday morning after dipping to 18-year lows during the previous trading session
    • The bears led most of the trading yesterday and was exacerbated by the EIA reporting the largest ever U.S. oil inventory build on record
    • Ironically, large inventory build could also be seen as bullish. This may seem counter-intuitive but the quicker storage fills, the sooner producers would have to shut-in, and thereby rapidly reducing supply
  • The EIA reported a build of 19,244 MBbl in U.S. inventories for the week ending April 10
    • The record build shot past the average analyst estimate of a 12,024 MBbl build
    • Stocks at storage and trading hub Cushing, Oklahoma, swelled by 5.7 MMBbl last week, the EIA said, and now total 55 MMBbl
      • The hub has a maximum storage capacity of 76 MMBbl, according to the EIA, with the previously observable max capacity lower by about 7 MMBbl
  • Natural gas is down 4.6c to $1.604/MMBtu
  • The 1.5 Bcf/d Ruby pipeline, which runs from southeastern Wyoming to the northern California and southern Oregon border, is set to have capacity cut in half after a force majeure declaration (Platts)
    • The force majeure is due to a mechanical issue on a compressor station, as a result, there is currently no listed return date
    • AEGIS notes that the force majeure could negatively impact Rockies basis, especially in a low-demand shoulder season
    • Rockies spot prices have fallen in the past two days, with Colorado Interstate Gas basis declining $0.40/MMBtu and Opal prices falling $0.30/MMBtu
  • Analysts expect a 71-Bcf build for the week ending April 10, this build would be slightly below the 73-Bcf build in the corresponding week last year
    • Analyst injection estimates ranged from a low of 58 Bcf to a high of 81 Bcf
    • A withdrawal within expectations would expand the surplus to the five-year average to 368 Bcf with total stocks at 2.095 Tcf

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