August 1, 2019

August 1, 2019
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  • WTI is down $1.32 to $57.26/Bbl, and Brent is down $1.13 to $64.04/Bbl
  • Oil prices took a breather on Wednesday, after four straight days of gains
    • The price decline for both Brent and WTI comes after the US Federal Reserve cut by only 25 bps
      • The broad market was hoping for a larger rate cut
  • US crude inventories fell by 8.5 MMBbl to 436.5 MMBbl last week in the seventh straight week of declines
    • Stocks at storage and trading hub Cushing, Oklahoma, fell by 1.5 MMBbl to 48.9 MMBbl in a fourth straight week of declines
    • Total crude oil stocks have dropped by almost 50 MMBbl since early June
  • The US and China will hold a new round of talks in September to try and resolve the ongoing trade war
    • The White House said the meeting was constructive and it expects negotiations on an enforceable trade deal to continue in Washington next month
    • An ongoing trade war has weighed on both crude oil and equity markets as both rely on demand growth to which the trade war is hampering
  • Natural gas is up 5.8c to $2.291/MMBtu
  • Natural gas storage is expected to build by roughly 52 Bcf
    • Analyst expectations range from 47 to 59 Bcf
    • An injection within these bounds would increase storage to 2.621 Tcf and signal a shift back to above-average builds
      • The corresponding week last year grew by 31 Bcf
  • FERC has given Cheniere the seal of approval to resume work on the Midship Pipeline
    • The 1.44 Bcf/d pipeline is designed to send SCOOP/STACK gas to Bennington, OK for further transport into northern Louisiana
  • Dominion updated investors on their progress with the Atlantic Coast Pipeline during their 2Q2019 earnings call
    • Construction is expected to resume in 3Q2019 with partial service in 2H2020
    • Full service should be available in 1H2021

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