- 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
- Mexico’s president has officially ended the country’s arbitration dispute over several natural gas pipelines
- 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
- However, according to the TCEQ, it appears Freeport has hit another mechanical snag as their main cryogenic heat exchanger went offline