August 20, 2019

August 20, 2019
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  • WTI is down 13c to $56.08/Bbl, and Brent is down 7c to $59.67/Bbl
  • Trade tensions between the US and China eased slightly on Monday
    • The US said it would extend a reprieve that permits China’s Huawei Technologies to buy components from US companies (Reuters)
    • AEGIS notes that markets continue to be heavily influenced by any news pertaining to the ongoing trade war
      • The fundamentals sometimes take a backseat as they have recently with trade war items in the news
  • US crude oil exports are becoming less attractive as the spread between WTI and Brent narrows
    • In the last three months, the margin for exporting a barrel from Cushing to international markets has shrunk from $11 to $4 a barrel
    • The prospect of sending less crude oil to Cushing and more to the Gulf Coast from the Permian could further narrow the WTI-Brent spread
      • AEGIS notes the US needs crude exports in order to clear excess light barrels. US prices could be pressured lower versus Brent to encourage adequate exports
      • Clients: For more color on this topic please read our Market Summary to be published this Friday the 23rd
  • Natural gas is up 0.4c to $2.214/MMBtu
  • Freeport’s Train 1 has officially produced liquefied natural gas, but will not begin shipping cargoes until September
    • Freeport is now the sixth liquefaction facility in the United States to produce LNG
    • Freeport and Kinder Morgan’s Elba facility are the last of the “first wave” of LNG facilities to startup
      • Both are producing gas and should begin shipping cargoes within the next month or so
  • Venture Global LNG has officially closed project financing for its Calcasieu Pass facility and TransCameron pipeline
    • The 1.3 Bf/d liquefaction facility should begin commercial operations in 2022
    • Venture Global is also in the process of financing and developing two additional 2.6+ Bcf/d export facilities in the Plaquemines and New Orleans areas
  • TC Energy’s, 2.6 Bcf/d, Sur de Texas-Tuxpan pipeline could end force majeure as early as Thursday (S&P)
    • Arbitration disputes, posed by Mexico’s CFE, shut down the pipeline shortly after it was built
    • The pipeline runs from South Texas, Agua Dulce Hub, into Central Eastern Mexico

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