August 2, 2019

August 2, 2019
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  • President Trump claimed Thursday afternoon that he would impose a 10% tariff on $300 billion worth of Chinese imports with the potential for further raises in the future
    • Oil prices dropped by the most in four years, roughly 8%, following this announcement
    • China has threatened tariff retaliations should the tariffs come to fruition, reigniting the threat of a significant global economic slow-down
  • A small steam cracker at ExxonMobil’s Baytown plant remained closed yesterday after a fire damaged a propylene separator (Platts)
    • The company said the refinery was operating at reduced rates
    • AEGIS notes the cracker outage may cause a small loss in demand for NGLs, but it could be offset by supply reductions as the refinery reduces throughput
  • Millions of barrels of Iranian crude are sitting in Chinese ports or bonded storage, meaning they have yet to be cleared through customs, thus violating U.S. sanctions (CNBC)
    • There are an estimated 12 to 14 MMBbls that could be drawn on, which could collapse oil prices by $5-$7
    • An estimated 20 MMBbls are supposedly heading for Chinese bonded storage
  • The EIA reported a build of 65 Bcf, this was much larger than the median expectation of a 52 Bcf injection
    • Total storage is now at 2.63 Tcf and only 123 Bcf below the five-year average
    • The larger than expected storage build also stopped what was looking like a two-day gas price rally
  • The TETCO line saw an explosion just south of its Danville, KY compressor station
    • TETCO declared a force majeure on the line
    • Southbound flows, primarily coming from the Appalachian region, could decrease by as much as 1.4 Bcf/d (PointLogic)
  • TC Energy has announced three compressor projects designed to help serve growing LNG demand in the Gulf Coast
    • The East Lateral Xpress will connect the Columbia Gulf pipeline to Gulf Coast LNG markets
    • The Louisiana and Chenier Xpress projects, combined, will move 2 Bcf/d to LNG export facilities
    • All three projects are expected to be completed and in service by 2022

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