April 17, 2020

April 17, 2020
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  • WTI is down $2.22 to $17.89/Bbl, and Brent is down $1.57 to $28.03/Bbl
  • Oil continues to be under pressure after multiple gloomy demand forecasts and a weak physical market
    • WTI fell below $18/Bbl on Friday morning as data showed China’s economy suffered a historic slump in 1Q and OPEC expecting demand of its crude to fall to the lowest in three decades
    • Futures have also been under pressure as weak demand has caused concerns that stockpiles, at the storage hub of Cushing, Oklahoma, will fill to capacity
  • Russia and Saudi Arabia hinted at the possibility of further output cuts after the latest OPEC+ deal to reduce supply failed to illicit a positive price response (Bloomberg)
    • OPEC’s own research projected on Thursday that even full implementation of the cuts won’t prevent a surplus 2Q
    • Saudi Arabia’s bin Salman has said that his country is ready to cut oil production further if needed when OPEC+ meets again in June
      • “Flexibility and pragmatism will enable us to continue to do more if we have to,” bin-Salman said on Sunday
  • Natural gas is up 9.6c to $1.746/MMBtu
  • Freeport LNG has completed construction of its third and final train with commercial operations expected to begin in May
    • Cameron LNG also received FERC approval to begin feed gas delivery into its third and final train
    • Annova LNG also received a key air permit, from the Texas Commission on Environmental Quality, for its 0.85 Bcf/d export terminal
  • On Thursday, the EIA announced an injection of 73 Bcf for the week ending April 10
    • This injection is nearly 3 times the five-year average build of 27 Bcf
    • Storage now stands 72%, or 876 Bcf, above last year’s levels of 1.221 Tcf
  • Spot JKM prices have hit a new record low of $2.186/MMBtu as global purchasers defer cargoes amidst a drastic collapse in demand
    • According to Platts the Global LNG market is still expected to grow by 4% in 2020, despite the demand drop

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