August 6, 2019

August 6, 2019
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  • WTI is up 17c to $54.86/Bbl, and Brent is up 19c to $60.00/Bbl
  • Nearly all asset classes fell on Monday as the US accused Beijing of manipulating its currency after China let the yuan drop to its lowest point in a decade
    • The losses were led by the tech sector and the Dow lost over 700 points in the worst down day of the year
    • Oil was also dragged lower as trade-war concerns were exacerbated
    • Prices are higher this morning after China moved to stabilize the yuan’s slide
  • Plains All American Pipeline is adding a fuel surcharge of 5c/Bbl on its Cactus 2 Permian pipeline after the US government rejected the company’s request for a waiver on steel tariffs (Argus)
    • The additional charge will go into effect on April 1 for the 670 MBbl/d pipeline
    • Last year Plains said having to pay the steel tariff would add $40 million to the cost of the project
    • WTI Midland prices are much improved over the last 10 or so months due to a few pipeline expansions. Cactus 2 is the first of three major crude pipelines this year that will soon create excess capacity out of the Permian basin
      • Plains previously told regulators last month that Cactus 2 “will be fully operational and capable of providing transportation services” by August 1
  • Natural gas is up 2.8c to $2.098/MMBtu
  • Cheniere is conducting planned maintenance on Trains 3 and 4 at Sabine Pass
    • It is estimated that the trains could be down for approximately three weeks
    • Each Train is capable of liquefying approximately 0.7 Bcf/d
    • LNG feed gas deliveries currently sit around 4.4 Bcf/d
  • The Mountain Valley Pipeline has faced another setback on a two-mile portion of its line in central Virginia over erosion issues
    • Construction in the area will be delayed indefinitely until the environmental issue is properly resolved
    • Project is still expected to come into commercial service by mid-2020
  • U.S. natural gas production hit an all-time daily high of 92.1 Bcf/d (Pointlogic)
    • The majority of production growth is coming from the Appalachian region
    • Permian growth has been relatively stagnant
      • However, commercial service of the Gulf Coast Express could release a fresh wave of gas on the market

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