December 12, 2019

December 12, 2019
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  • WTI is up 14c to $58.90/Bbl, and Brent is up 31c to $64.03/Bbl
  • Oil markets will still be over supplied next year even if OPEC+ follows through with its pledge to make deeper production cuts, according to the IEA
    • The IEA said in its monthly report that oil inventories could build by 700 MBbl/d in Q1 even with OPEC+’s entire pledged cutback of 2.1 MMBbl/d
    • The agency also said that non-OPEC supply, led by the US, continue to grow much faster than world demand
  • The EIA reported a build in crude stocks on Wednesday for the week ending December 6, sparking an immediate $1/Bbl sell off
    • US crude stocks increased by about 800 MBbl verses the average Bloomberg survey estimate of -2,924 MBbl
    • Prices worked to recover back to pre-data release yesterday as the build in stocks caught market participants off guard
  • Epic Midstream loaded an Aframax-sized vessel with crude at its converted dock in Corpus Christi, Texas (Argus)
    • Epic repurposed the facility to export crude while a larger export terminal is under construction
    • The larger greenfield project will be able to load Suezmax-sized tankers that can hold up to 1 MMBbl and is expected to start service in the third quarter of 2020
  • Natural gas is up 4.2c to $2.285/MMBtu
  • A period of Arctic cold is set to move in next week as weather runs added 7 Heating Degree Days overnight, bringing prompt-month gas prices just under $2.30/MMBtu
    • However, this period of colder-than-normal weather does not appear to be a long-term event meaning prompt-month prices might not see a sustained rally
    • A withdrawal of more than -77 Bcf today could provide some additional upside to prices today
  • OneOk’s 240 MBbls/d, Y-grade NGL, Elk Creek Pipeline has officially been placed into service
    • The line, which can be expanded up to 400 MBbls/d, is expected to be flowing at full capacity by 1Q2020 according to the company
    • Elk Creek runs through the Williston Basin and the Powder River/Denver-Julesburg basins
  • Tellurian’s 3.5 Bcf/d export facility was approved for site preparation, taking it one step closer to LNG production by 2023
    • Tellurian, which was planning on making a Final Investment Decision in 2019, appears to be delaying their decision until 2020

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