December 17, 2019

December 17, 2019
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  • WTI is up 12c to $60.19/Bbl, and Brent is up 31c to $65.53/Bbl
  • WTI continues to trade above $60 this morning, supported by the U.S.-China trade deal and OPEC+’s pledge to further reduce crude supply in 2020
    • A U.S.-China trade deal raises the aspects of better crude oil demand growth in 2020 that have been forecast to underwhelm next year
  • Chinese refineries are importing IMO 2020-compliant fuel due to costly tariffs discouraging domestic production (Bloomberg)
    • Taxes on locally-produced shipping fuel were expected to be reduced ahead of new IMO rules, but delays have caused Chinese buyers alter purchasing behavior
    • IMO 2020 changes the threshold for how much sulfur content fuel can have when being used by merchant marine vessels
  • The number of drilled but uncompleted (DUC) wells in major US shale basins fell by 131 to 7,574 in November, continuing the downward trend (EIA)
    • This was the sixth consecutive month of declines
  • Crude output from the top US shale basins is expected to rise by 30 MBbl/d to about 9.14 MMBbl/d in January, according to the EIA
    • The agency’s Drilling Productivity Report projected a monthly increase largely reflects an expected rise in the Permian basin
  • Natural gas is up 6.2c to $2.358/MMBtu
  • FERC has approved commissioning activity at Cameron LNG’s second train
    • This approval helps put the train on track for a 1Q2020 start date
    • Cameron Train 3 is anticipated to be available by August 2020, marking the facilities completion
  • The Permian Global Access Pipeline will be holding open houses for the pipeline in January 2020, according to Tellurian
    • Environmental assessments for the pipeline are expected to begin in March
    • The 2.0 Bcf/d pipeline is anticipated to begin construction in early 2021, with an in-service date targeted for 2023
    • The pipeline is meant to connect Permian gas directly to southwestern Louisiana in order to serve Tellurian’s 3.5 Bcf/d export facility
  • Equitrans Midstream reaffirmed a late 4Q2020 in-service date for their Mountain Valley Pipeline during their 2020 capex guidance
    • Equitrans plans to commit roughly half of their $1.3 billion budget to completing the long-delayed pipeline in 2020

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