August 7, 2019

August 7, 2019
Print Friendly, PDF & Email
  • WTI is down $1.36 to $52.27/Bbl, and Brent is down $1.19 to $57.75/Bbl
  • Brent is now trading at a seven-month low at about $58/Bbl
    • Price has fallen more than 20% since April 2019 peak with about 10% of the drop attributable to President Trump saying last week he would slap further tariffs on China
    • Deterioration of trade talks between China and the US have deepened concerns about the demand outlook
    • AEGIS notes that despite WTI trading at $52/Bbl, it is still trading range bound between $50 and ~$62 that started at the beginning of the year
  • Plains All American Pipeline said its Cactus 2 pipeline is mechanically complete from Wink, Texas, to Ingleside near Corpus Christi and is 50% filled with crude
    • The pipeline will start initial service around August 15
    • The company also said it plans to be at full service on Cactus 2 by 1Q ‘20
    • Cactus 2 is the first major crude pipeline to add capacity out of the Permian basin this year
  • The EIA lowered its domestic crude output forecast for 2019 by 0.7% to 12.27 MMBbl/d, but kept its 2020 US crude oil production estimate flat at 13.26 MMBbl/d, according to its monthly Short-Term Energy Outlook
    • The EIA expects a slowdown in monthly production growth in the Lower 48 averaging 50 MBbl/d per month from the fourth quarter of 2019 through the end of 2020
      • This is in contrast to an average growth of 110 MBbl/d per month from August 2018 to July 2019
  • Natural gas is up 1.3c to $2.124/MMBtu
  • EnLink Midstream has signed an agreement to serve feed gas to Venture Global’s Calcasieu Pass LNG Terminal
    • While the Calcasieu Pass has yet to receive a positive FID, given EnLink’s commitment and the ten billion in capital raised, the decision could be decided on in the near future
      • The project timeline originally called for a 1H 2019 FID
    • The Calcasieu Pass will be able to export roughly 1.3 Bcf/d
  • The back half of August appears poised for some more typical summer weather according to the 11 to 15-day forecast
    • That being said, we are running out of summer to rely on weather to rally gas prices
      • The rest of August appears to still be remaining cool

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