August 28, 2019

August 28, 2019
Share
Print Friendly, PDF & Email
  • WTI is up $1.26 to $56.19/Bbl, and Brent is up $1.05 to $60.56/Bbl
  • Crude oil is trading higher after the American Petroleum Institute (API) reported a massive drop in crude inventories for the week ending August 22
    • Tuesday afternoon the API showed a drop of 11.1 MMBbl, compared to analyst expectations of around a 2.1 MMBbl draw
  • China’s crude oil imports were up 14% y-o-y in July as new refineries have come online
    • Imports were 9.67 MMBbl/d in July with Saudi Arabia supplying the most at 1.647 MMBbl/d
    • US crude imports to China rose in July by 93% from June to 351 MBbl/d, the highest level in 13 months (Argus)
      • Imports in the first seven months of the year were down by 64% from a year ago amid an ongoing US-China trade war
    • China announced late last week that it would impose a 5% tariff on US crude imports starting September 1
  • BP has agreed to sell its entire business in Alaska to Hilcorp Energy for $5.6 billion
    • The transaction will make Hilcorp the second-largest producer in Alaska behind ConocoPhillips
    • BP chief executive said “We are steadily reshaping BP and today we have other opportunities, both in the US and around the world”
  • EIA petroleum data is due out this morning at 9:30 am CT
    • U.S. Crude Inventories:                  –    2,941 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:              –       137 MBbls
    • U.S. Distillate Inventories:             +    1,156 MBbls
    • U.S. Refinery Utilization:               –     0.38% change
  • Natural gas is up 6.1c to $2.263/MMBtu
  • TC Energy’s 2.6 Bcf/d Sur de Texas (SDT) pipeline could finally see the resumption of activity within the next couple of weeks
    • Mexico’s president has officially ended the country’s arbitration dispute over several natural gas pipelines
      • Federal Electricity Commission (CFE) head Manuel Bartlett stated that the SDT will be the first pipeline to begin commercial operations
    • AEGIS notes that the forward curves for southeast Texas basis do not imply high utilization on this line at first
      • There may also be constraints that only allow local volumes to move to this new pipe
  • Cheniere’s Corpus Christi Train 2 has been cleared by FERC to begin service
    • Train 2 is currently undergoing commissioning, but could be completed within the next couple of weeks
    • Train 3 is expected to be completed in 2H2021
    • LNG feed gas remains strong at 6.5 Bcf/d
  • A second empty LNG tanker has now reportedly docked outside Freeport LNG’s liquefaction facility
    • However, according to the TCEQ, it appears Freeport has hit another mechanical snag as their main cryogenic heat exchanger went offline
      • This follows the gasket rupture earlier in the month that initially delayed exports
    • Flows to the facility are down 57% to 65 MMcf/d after setting records over the weekend

Access Our Deeper Market Insights

Product Factor Matrix

Proprietary view of priced-in factors driving the market vs. potential bullish and bearish surprises.

Learn More

Trading Recommendations

Clear trading recommendations based on real market opportunities that enable clients to take action.

Learn More

Market Data

A comprehensive suite of the latest curves, spot pricing, settles, and strips to drive confident hedging decisions.

Learn More

Benchmarking and Trade Analytics

Real-time access to analyze your hedging strategy against AEGIS benchmarks and current market activity.

Learn More