April 29, 2020

April 29, 2020
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  • WTI is up $2.07 to $14.41/Bbl, and Brent is up $1.53 to $21.99/Bbl
  • Oil prices rose on Wednesday after U.S. stocks swelled less than expected and gasoline inventories fell
    • U.S. crude inventories rose by 10 MMBbl to 510 MMBbl in the week to April 24, according to industry group American Petroleum Institute (API)
    • Traders and investors will typically pay more attention to the more followed government data to be released later this morning from the Department of Energy
  • Energy regulators in Texas will vote next week on a proposal to reduce the state’s oil production after delaying it on concerns of legal challenges (Reuters)
    • Texas Railroad (RRC) Commissioner Ryan Sitton, who has been an advocate for output reductions, will call for curtailments of 20% of Texas’ supply
    • If the motion passes, curbs would remain in place until the RRC determines that global demand has crossed 85 MMBbl/d
  • EIA weekly data is due at 9:30 AM CST
    • U.S. Crude Inventories:                  +     11,678 MBbls (Avg. Bloomberg surveys)
    • U.S. Gasoline Inventories:             +        2,755 MBbls
    • U.S. Distillate Inventories:             +       3,888 MBbls
    • U.S. Refinery Utilization:               –      0.79% change
  • Natural gas is up 0.1c to $1.949/MMBtu
  • Argus reports that 16 LNG loadings between Sabine Pass and Corpus Christi LNG are cancelled, while at least another five shipments from Freeport have also likely been cancelled
    • Platts notes that LNG netbacks from the Dutch TTF dipped as low as negative $-0.90/MMBtu and JKM netbacks dipped well below $-1.00/MMBtu last week
    • U.S. LNG feed gas demand has averaged below 8 Bcf since the start of last week
  • Colorado Interstate Gas (CIG) and Midcontinent basis continue to noticeably tighten up
    • CIG basis has improved nearly $0.30/MMBtu over the last 30 days, while Midcontinent basis like ANR, Panhandle, and OneOK have also seen improvements near $0.30/MMBtu
    • One of the reasons for the basis price improvement could be attributed to in-basin shut-ins across the country
  • Tellurian secures bridge financing to keep project afloat amid weak LNG Market Conditions
    • Terllurian has raised an estimated $47.3 million from an institutional investor
    • Long-term offtake contracts have been at a standstill for several months, increasing Tellurian’s need to secure financing elsewhere
    • Once completed, the project is expected to have capacity of 27.6 million mt/y
  • U.S. court ruling could threaten pipeline projects with delays
    • On April 15, Chief U.S. District Judge Brian Morris ruled that the Army Corps had violated federal law by issuing the so-called Nationwide Permit 12 that allows pipelines to cross water bodies without consulting federal agencies on risk to local and endangered habitats
    • The ruling halted work on pipelines through streams and waterways, but allows other construction to continue

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