December 11, 2019

December 11, 2019
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  • WTI is down 22c to $59.02/Bbl, and Brent is down 35c to $63.99/Bbl
  • Oil prices are slightly down this morning as crude oil stocks rose last week, according to the American Petroleum Institute (API)
    • The API reported a 1.4 MMBbl increase in crude stocks on Tuesday afternoon, surprising analysts
    • Government data is due out later this morning
  • The Energy Information Administration (EIA) lowered its US crude production estimates for 2019 and 2020 on declining rig counts
    • Domestic production will average 12.25 MMBbl/d this year, down 0.3% from the previous forecast, according the agency’s Short-Energy Energy Outlook (STEO) report
    • The EIA also lowered its forecast for 2020 by 0.9% to 13.18 MMBbl/d
  • EIA weekly data is due at 9:30 AM CST
    • U.S. Crude Inventories:                  –     2,924 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:             +     2,534 MBbls
    • U.S. Distillate Inventories:             +     1,563 MBbls
    • U.S. Refinery Utilization:               +     1.00% change
  • Natural gas is up 2.4c to $2.288/MMBtu
  • Chinese companies are trying to offload LNG cargoes on the spot market due to high storage, a slowing economy, and a milder-than-expected winter (Reuters)
    • Most volumes heading into the country are comprised of term volumes, which were committed under long term contracts, or spot volumes from last month
    • China, the second largest purchaser of LNG, could push these spot volumes into Europe and further saturate the global market
  • The EIA predicts production growth to slow in 2020 due to a lag between price changes and drilling activity
    • The agency also forecasts dry gas production to average 95.1 Bcf/d in 2020
    • Consumption forecasts saw 2 Bcf/d gains for 4Q2019 and 1Q2020, totaling 92.51 Bcf/d and 104.54 Bcf/d respectively

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