August 16, 2019

August 16, 2019
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  • WTI is up 39c to $54.86/Bbl, and Brent is up 60c to $58.83/Bbl
  • OPEC cut its 2019 oil demand growth forecast for the second time in three months on Friday
    • In their monthly report, OPEC said it expects a deceleration of oil demand growth to 1.1 MMBbl/d, a cut of 40 MBbl/d
    • OPEC cited growth fears, saying “the outlook for market fundamentals seems somewhat bearish for the rest of the year, given softening economic growth, ongoing trade issues and slowing oil demand growth”
    • OPEC’s downgrade of demand echo’s other major oil research agencies recent action
  • Epic is starting service on a pipeline that will add 400 MBbl/d of crude takeaway out of the Permian (Argus)
    • Moda Midstream, a terminal operator in the Corpus Christi, Texas, said it will receive crude from the new pipeline within 24 hours
    • Epic’s start-up comes right after Plains All American Pipeline’s 670 MBbl/d Cactus 2 pipeline started service
  • Natural gas is down 4.7c to $2.185/MMBtu
  • Freeport LNG has hit another snag in their Train 1 startup after a gasket rupture leaked refrigerant
    • One of two empty LNG tankers is reported to already be docked at the liquefaction facility with the second one not arriving until September
    • Commercial operations will resume by the end of August, according to Freeport
  • Natural gas storage built by 49 Bcf according to the EIA, this was slightly below the 54 Bcf expectation
    • Storage now sits at approximately 2.74 Tcf, which is 357 Bcf higher than last year
    • The corresponding weekly injection for last year was 35 Bcf, however this week’s injection was on par with the 5-year average which was 49 Bcf
  • Consulting firm McKinsey & Company came out with their natural gas outlook into 2030
    • They claim that North America can produce enough gas below a Henry Hub price of $2.80/MMbtu to meet 25+ years of demand
      • Over half of future gas supply will come solely from the Permian and Appalachia
    • LNG will continue to be the main driver of demand in the coming years

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