August 30, 2019

August 30, 2019
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  • WTI is down 64c to $56.07/Bbl, and Brent is down 19c to $60.89/Bbl
  • Oil is on track for its largest weekly increase since mid-July after some easing on the US-China trade war front and crude inventory declines
    • China said Thursday that it wouldn’t immediately retaliate against the latest White House tariff increase (Bloomberg)
    • President Trump said on Thursday that the US and China are scheduled to have a conversation about trade, but his rhetoric lacked details
  • The Magellan East Houston-WTI premium fell yesterday to the lowest since late July last year
    • AEGIS notes that many pipeline operators have lowered their tariffs since additional pipelines have come into service in the Permian basin
    • The additional volumes headed to the Gulf Coast from the Permian add more supply on the coast. If not consumed by refineries or exported, those barrels can weigh on coastal pricing
    • To stay competitive, pipelines that travel from Cushing to the Gulf Coast have also lowered their tariffs
  • Natural gas is down 2.2c to $2.274/MMBtu
  • The EIA reported a 60-Bcf build in natural gas storage for the week ending August 23
    • Storage now stands at approximately 2.96 Tcf, a 363-Bcf surplus to last year’s levels
    • Builds are forecast to jump to about 80 Bcf and near 78 Bcf respectively for the following two weeks
  • FERC has reversed it’s ruling on Williams’ 650 MMcf/d Constitution pipeline, which has been delayed since April 2016
    • The project is planned to run from northeastern Pennsylvania into central New York
    • Despite the positive ruling, construction is likely to remain delayed as Williams strategizes its next steps according to a spokeswoman for the company
    • When in service, the pipeline would connect Northeast Pennsylvania supply to existing pipelines in New York
  • Hurricane Dorian has been upgraded to a category two hurricane
    • Weather forecasts have the storm most likely traveling up the east coast or up through Florida, but there is still some potential for the hurricane to enter the Gulf
    • Regardless of the hurricane’s trajectory, it is likely to suppress gas demand through power outages and cooler weather

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