April 30, 2020

April 30, 2020
Share
Print Friendly, PDF & Email
  • WTI is up $1.89 to $16.95/Bbl, and Brent is up $2.59 to $25.13/Bbl
  • Oil climbed for a second day as global production cuts grow and signs of demand recovery emerged (Bloomberg)
    • Norway said it will participate in oil-output cuts for the first time since 2002, joining other major producers
    • Some European demand figures are improving, while EIA data on Wednesday showed a surprise jump in U.S. gasoline demand
    • Traffic in China is returning to the streets, supporting a boost in fuel use and refining rates
  • A fleet of oil supertankers carrying oil from Saudi Arabia is heading for the U.S.
    • A total of 43 MMBbl is set to arrive on the U.S Gulf and West Coasts by May 24, according to Rystad Energy
    • The flotilla will join a queue of 76 tankers waiting to unload in U.S. ports
    • Volumes of crude oil on water off the West Coast stood at 19.8 MMBbl Wednesday, down from 26 MMBbl last week (Kpler)
    • The Gulf Coast had 14.8 MMBbl on the water
  • Spreads, Curves, and Options:
    • Contango in both Brent and WTI spreads contracted sharply on Wednesday
      • WTI June-July spread narrowed $1.20 to -$4.06/Bbl; lower at -$3.88 this morning
    • Open interest for the June WTI contract has fallen 50% since prices turned negative on April 20 (Nymex data)
    • WTI June -$50 puts traded 55 times; strike is the lowest listed contract
    • Bakken Blend/Guernsey spot spread to WTI at Cushing was +$1.25 to +$1.75/Bbl on Wednesday, strongest since October 2015
      • This is in contrast to a nearly -$16/Bbl discount observed in the spot market at the end on March
  • Natural gas is down 1.9c to $1.850/MMBtu
  • According to Poten and Partners, an energy and ship brokerage, utilization rates for U.S. LNG export terminals may drop by 40%, in June, due to cancelled cargoes
    • The company also speculated that global markets would need another 30-40 cargo cancellations per month, through October, to balance out supply and demand
    • Cheniere believes they will see year-over-year declines in LNG demand over the coming quarters due to reduced economic activity and high inventory levels
  • Enterprise Product Partners will cut capital spending by $1.1 Billion in 2020, as well as delay or cancel 13 projects
    • Enterprise does not expect to receive federal approval for its Sea Port Oil Terminal and it currently does have the project budgeted in its capital expenditure program in ’21 or ‘22
    • The 540 MBbls/d Midland-to-Echo 4 expansion is expected to be delayed into +2021
  • Analysts expect a 69-Bcf injection for the week ending April 24 (Platts)
    • This would be below both the 92-Bcf injection reported in the corresponding week last year, and the five-year average of 74 Bcf
    •  Analyst injection estimates ranged from a low of 55 Bcf to a high of 80 Bcf
    • A withdrawal within expectations would contract the surplus to the five-year average to 359 Bcf with total stocks at 2.209 Tcf

Access Our Deeper Market Insights

Product Factor Matrix

Proprietary view of priced-in factors driving the market vs. potential bullish and bearish surprises.

Learn More

Trading Recommendations

Clear trading recommendations based on real market opportunities that enable clients to take action.

Learn More

Market Data

A comprehensive suite of the latest curves, spot pricing, settles, and strips to drive confident hedging decisions.

Learn More

Benchmarking and Trade Analytics

Real-time access to analyze your hedging strategy against AEGIS benchmarks and current market activity.

Learn More