December 19, 2019

December 19, 2019
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  • WTI is up 1c to $60.94/Bbl, and Brent is up 6c to $66.23/Bbl
  • Government data showed a decrease in crude oil stocks last week, sending prices higher on Wednesday morning
    • US crude stocks fell 1.1 MMBbl to 446.8 MMBbl in the week ended December 13
    • Oil prices rallied as government data showed a draw in stocks, a day after the American Petroleum Institute (API) sent prices lower showing an increase in stocks
  • Marine Gasoil (MGO) is becoming a valid alternative fuel option in the face of IMO 2020
    • Very-low sulfur fuel oil (VLSFO) in Singapore has increased in cost due to increased demand by marine ships looking to come into compliance by January
    • This has increased the price for VLSFO and made it about the same cost as MGO
    • The spread between VLSFO and MGO has been hovering around -$50/ton, before trading at near parity
    • The International Maritime Organization (IMO) new rules effective January 1 ban ships from burning fuel with more than 0.5% sulfur, unless fitted with scrubbers
  • Natural gas is down 3.7c to $2.249/MMBtu.
  • The 2.0 Bcf/d Whistler Pipeline announced that it has fully subscribed capacity on its line after ending its open season this week
    • MPLX, the developer of the project, also stated that it was on track to receive all necessary permits to meet the 3Q2021 in-service target with construction planned to begin next year
  • PetroChina, one of China’s largest LNG buyers, has offered to sell a cargo much cheaper than their competitors for the second time in the past few months (Bloomberg)
    • Given PetroChina’s willingness to sell its cargos cheaply, in the peak of winter, suggests that the global market, especially in Asia, is oversupplied
    • JKM, Asia’s LNG benchmark, remains around $5.50/MMBtu – it was above $9.00/MMBtu this time last year
  • Freeport Train 2 has shipped its first commissioning cargo, assuming no issues occur, the second train should be well positioned to be fully operational by January 2020
    • The company is also planning to make a Final Investment Decision on a fourth train in 1Q2020
    • Each train represents a little over 0.7 Bcf/d of capacity

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