August 29, 2019

August 29, 2019
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  • The EIA reported a large draw of 10 MMBbls, confirming the API’s numbers
    • This draw came as crude production rose to 12.5 MMBbls, a new record
    • Stocks at Cushing fell by two MMBbls, marking the eighth straight week of declines
  • The 1 MMBbl/d Jupiter Permian pipeline is delaying its planned in-service date to 1Q2021, as opposed to 3Q2020
    • The line is designed to move crude from the Permian to Brownsville, TX
    • Construction of the pipeline is planned for 4Q2019
  • China indicates the country is willing to negotiate, rather than retaliate, after the latest round of tariff increases last week (Bloomberg)
    • President Trump’s newest tariffs are supposed to come into effect on September 1
    • The next planned meeting between President Trump and Jinping was for September, however the outcome is in doubt
  • Analysts estimate a 57-Bcf build, which would be less than the 66-Bcf build this time last year, for the week ending August 23
    • Predictions ranged from 53 Bcf to 60 Bcf
    • Should injections fall within estimates, total storage should rise to around 2.85 Tcf
  • Sasol announced yesterday its new ethane-cracking olefins plant in Lake Charles was 50% operational
    • The company expects full service from the plant in 1Q2020
    • AEGIS notes the plant is one, among several others, scheduled to significantly boost ethane demand in late 2019 and into 2020. The increase in ethane demand may encourage upstream and midstream operators to stop “rejecting” ethane into the gas stream, and instead collect ethane for sale into the petchem market. The effect would be to support gas prices by reducing gas supply. However, there will likely have to be a price improvement from ethane before those choices are made.
  • Hurricane Dorian, now a category 1 storm, is aimed at central Florida
    • Most models have it turning north at Florida, rather than going into the Gulf of Mexico’s oil- and gas-producing areas
    • Dorian is north of Puerto Rico on Thursday, and would arrive on US mainland Monday or Tuesday
    • AEGIS notes the storm is more a demand event than supply event, with its current forecast track. The storm could reduce demand for natural gas by damaging power generation and transmission, and by reducing temperatures.

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