April 24, 2020

April 24, 2020
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  • WTI is up 83c to $17.33/Bbl, and Brent is up 47c to $21.80/Bbl
  • The Trump administration is weighing plans to steer financial aid to oil drillers (Bloomberg)
    • Treasury Secretary Steven Mnuchin said he is considering a lending program for the companies seeking aid to the deal with a plunge in prices
    • “One of the components we’re looking at is providing a lending facility for the industry” Munuchin told Bloomberg on Thursday
    • Any action to prop up oil and gas companies is sure to be met with strong Democratic opposition
  • Harold Hamm’s Continental Resources invokes ‘Act of God’ clause following Monday’s negative oil price move
    • The company told at least one refiner it couldn’t make an oil delivery
    • On Tuesday, Continental declared force majeure on at least one of its contracts to deliver oil to a producer, according to Bloomberg
    • In the document seen by Bloomberg, Continental said it couldn’t have foreseen the dramatic rout caused by the coronavirus outbreak, and that selling oil at negative prices constitutes waste
  • U.S. midstream company Energy Transfer is weighing a plan to store crude in idle pipelines as shippers scramble to find available storage (Argus)
    • The company is looking at ways to idle two pipelines in Texas by “moving product around” and use them as storage space by mid-May. The two lines would provide about 2 MMBbl of storage
    • Energy Transfer is in the process of asking the Texas Railroad Commission for permission to change the method of operation on the lines. “After that it will be a matter of adding pumps to the lines, which we can easily achieve,” the company said.
    • AEGIS notes oil infrastructure is under heavy pressure lately as there isn’t enough demand to keep storage tanks from filling up soon. Tanks at Cushing, Oklahoma, only have about 16 MMBbl of capacity remaining.
  • Natural gas is down 2.9c to $1.786/MMBtu
  • LNG Cargo cancellations have begun for cargoes set to load in June (Reuters)
    • This level of cancellations could push up to 2 million metric tons (96 Bcf) back onto the domestic market, Poiten & Partners said in a Wednesday Webinar
    • With LNG arbitrage disappearing for cargoes bound for Europe or Asia, we have yet to see any meaningful decrease in LNG feed-gas

    On Thursday, the EIA announced an injection of 43 Bcf for the week ending April 17

    • This injection was substantially smaller than the 73 Bcf build reported a week earlier
    • Storage now stands 63%, or 827 Bcf, above last year’s levels of 1.313 Tcf

    Spot JKM prices have hit a new record low of $1.938/MMBtu as global purchasers defer cargoes amidst a drastic collapse in demand (S&P)

    • Spot JKM prices reached a new low every day this week, however this could help balance the market for July deliveries

    Freeport LNG request approval to place Train 3 in service (Point Logic)

    • The LNG export terminal at Quintana Island in Freeport, Texas will have an expected capacity of 15 Mtpa (720 Bcf) with all three trains online
    • The train will come online by April 30, barring a denial from FERC

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