August 12, 2019

August 12, 2019
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  • WTI is down 25c to $54.25/Bbl, and Brent is down 38c to $58.15/Bbl
  • President Trump said planned talks with China next month could be called off
    • Threats to cancel negotiations followed the IMF’s report on Friday that warned of downside risks to the Chinese economy if the US/China trade war escalates (Bloomberg)
  • The US oil-directed rig count fell by six to 764, the sixth straight week of declines
    • Active rigs are at their lowest since January 2018
    • By state, Alaska lost the most, at four, with Louisiana and Oklahoma both lost two each
  • Money managers increased their net-long positions on WTI by 5.4% for the week ended Aug. 6
    • The timing allowed hedge funds to participate in last weeks late rally of 6.7% on the backs of news that Saudi Arabia was mulling measures to ease the price decline
  • Natural gas is up 0.2c to $2.121/MMBtu
  • Summit Midstream updated investors on their 1.35 Bcf/d Double E pipeline, which is being developed in tandem with Exxon Mobil
    • Summit stated they have secured a substantial majority of commitments and expect a service date of 3Q2021
    • The Double E pipeline will deliver gas from the Delaware Basin down to the Waha Hub
  • The initial forecasted cool wave that was developing in August is beginning to reverse
    • The 6-10- and 11-15-day forecast have warmer weather developing across the majority of the US
      • Hotter temperatures will be primarily concentrated on the east coast and in Texas
    • However, the price effects of emerging summer heat may be capped as we near the start of the shoulder months
  • LNG feed gas is slowly starting to recover after dipping as low as 3.78 Bcf last week
    • Current estimates have feed gas at 4.74 Bcf
    • This is still well-off last month’s highs of 6.0+ Bcf

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