August 9, 2019

August 9, 2019
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  • WTI is up 69c to $53.23/Bbl, and Brent is up 69c to $58.07/Bbl
  • The International Energy Agency (IEA) said in its monthly report released today that the outlook for global oil demand is “fragile” amid growing signs of an economic slowdown
    • The IEA cut is estimates for global oil demand growth in 2019 by 100 MBbl/d to 1.1 MMBbl/d, implying a growth rate of about 1.1%
    • 2020 was lowered by 50 MBbl/d to 1.3 MMBbl/d, or a rate of 1.3%
    • There was some good news for the bulls in their report as the agency see a demand surge in the second of this year, tightening markets sharply.
      • Consumption will expand by 1.6 MMBbl/d in 2H ’19, about three times the rate seen in the first half
  • Energy Transfer is negotiating with potential shippers on a project to load VLCCs connected to its terminal in Nederland, Texas (Argus)
    • The company is “extremely optimistic” that the VLCC project will move forward, according to COO Marshall McCrea
    • Energy Transfer is also planning to move more crude to Nederland later this year with an expansion of its Permian Express system almost complete
      • The expansion, Permian Express 4, will add 120 MBbl/d from Colorado city to Nederland with full capacity online by the end of the third quarter
  • Natural gas is down 5.3c to $2.075/MMBtu
  • The EIA reported a build of 55 Bcf compared to the 57 Bcf analyst estimate
    • Total storage now sits at approximately 2.7 Tcf and is at a deficit of 111 Bcf to the five-year average
    • This was one of the lowest builds in the past four months
  • Cheniere stated during its earnings call that a FID for the Corpus Christi Stage 3 expansion would be decided in 1H2020
    • The Stage 3 expansion consists of seven midscale trains which could produce roughly 1.5 Bcf/d upon completion of the seventh train
  • Despite the emergence of cooler temperatures across the country, a heat wave is planned to hit Texas for the entire month of August
    • The excessive heat could help to improve Waha basis as power burn in the Lonestar state ramps up

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