December 2, 2020

December 2, 2020
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  • WTI is down 7c to $44.48/Bbl, and Brent is down 2c to $47.40/Bbl
  • Oil is trading slightly lower (-0.5%) this morning, after having its worst day in over two weeks
    • OPEC+ and its allies are continuing informal negotiations, seeking to reach an agreement before the group’s next scheduled meeting on Thursday, December 3
    • The American Petroleum Institute reported a build of 4.1 MMBbls last week, well above analysts’ expectations of 2.4 MMBbls (Reuters)
  • OPEC+ is scheduled to meet tomorrow to reach an agreement to extend oil output cuts as coronavirus cases continue to threaten demand
    • The cartel’s standing agreement would return over 1.9 MMBbl/d to market beginning in January
    • Tensions flared during Monday’s meeting as the UAE aired grievances with the current output quota, and the increase in non-OPEC production that threatens the cartels market share, according to Bloomberg
  • EIA weekly data is due at 9:30 am CST
    • S. Crude Inventories: – 1,900 MBbls (Avg. Bloomberg surveys)
    • S. Gasoline Inventories: + 1,554 MBbls
    • S. Distillate Inventories: – 1,092 MBbls
    • S. Refinery Utilization: + 0.63% change
  • Natural gas is up 4.6c to $2.926/MMBtu
  • Gas prices rose Wednesday morning amid cooler changes to the weather forecast
    • Over the past 24 hours, cooler temperatures mostly in the 11-14 window, contributed to the addition of 1.6 HDDs or about 3 Bcf
    • The January (prompt) contract has recovered about 20c to $2.92 since November 19 as heating demand has started to pick up
  • U.S. LNG exports favored the United Kingdom in November amid Panama Canal delays (Platts)
    • The U.K. was the preferred destination for U.S. LNG as wait times of up to more than a week for LNG tankers passing through the canal delayed Pacific shipments
    • All LNG facilities in the U.S. look to be operating at or near full rates after reaching a record 11.3 Bcf/d on December 1, according to Bloomberg data

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