April 6, 2021

April 6, 2021
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  • COVID-19 resurgence in India reduces the country’s appetite for Saudi oil
    • Refiners in the world’s third-largest importer have sought to reduce May imports by a third, on new demand concerns
    • India has been a vocal critic of OPEC+’s hawkish stance on oil markets, and its moves to support oil prices in the last few months
  • Oil market’s focus shifts to Iran after OPEC+ decision – Goldman Research
    • Iran and other world powers will begin their most legitimate talks to revive the nuclear deal today (JCPOA)
    • According to Goldman Research, a full recovery in Iranian exports will not happen until the summer of 2022. The bank says a recovery in Iran exports before the end of 2021 would add $5 of downside risk, while the lack of an agreement would create around $10 of upside risk
  • Citi sees tighter oil market following OPEC+ decision to gradually return output
    • Global inventories are forecasted to drop by 700 MBbl/d more than previously estimated due to Sudi’s move to return production in monthly increments
      • The bank had expected Saudi Arabia to fully reverse its supplementary 1 MMBbl/d cuts in May
    • Markets should tighten even more than previously expected as seasonal product demand is expected to ramp up over the next 45 days, before any increase in OPEC+ output – Citi
  • Waha basis prices for summer are trading at multiyear highs on lower production and more competition for the region’s gas (Platts)
    • Peak-summer months of June, July, and August, for Waha are averaging only 8c behind Henry Hub
    • In January, Kinder Morgan’s Permian Highway Pipeline opened a new eastbound corridor for Permian gas, increasing an Eastbound (Gulf Coast) versus Westbound competition for the basin’s supply
    • Gas production in the Permian has averaged about 11.6 Bcf/d this year, about 1.2 Bcf/d lower than a year ago, according to S&P data
  • The early read on April weather is it will be one of the warmest in the past 20 years
    • The typical amount of demand expected in April is 341 heating degree days (HDDs) for the 10-year climate normal
    • To start the month, April was forecast to record about 317 HDDs, according to Commodity Weather Group
    • AEGIS notes that April is typically a low-demand month and commands slightly more heating demand than cooling demand on average. In other words, a “hot” or “Cool” April typically means less than it would for other calendar months for gas prices

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