December 23, 2020

December 23, 2020
Share
Print Friendly, PDF & Email
  • Oil rally and fuel glut push Asian refiners’ margins below break-even
    • Asian demand has rebounded sharply from its lows reached in April; Still, a large glut of product stocks remains as inventories in the East of Suez region are at their highest levels since June, according to Bloomberg
    • The rally in crude prices has caused further strain on Chinese refinery margins as processing costs have risen. Complex refining margins in the Asian oil hub of Singapore, a proxy for the region, fell from $1.22/Bbl at the end of October to as low as -2 cents earlier this month, according to Bloomberg
  • President Trump signals he may not sign the stimulus bill, describing it as “wasteful spending”
    • The sitting president targeted the stimulus checks under the current legislation, saying they should be changed from $600 to $2,000. House Speaker Nancy Pelosi (D-CA) lauded the initiative and said Democrats would be ready to pass the measure unanimously later this week
    • President Trump has not said whether he would veto the bill, though the late change in the administration’s position will likely complicate the package’s future
  • EIA weekly data is due at 9:30 am CST
    • U.S. Crude Inventories: – 2,899 MBbls (Avg. Bloomberg surveys)
    • U.S. Gasoline Inventories: + 248 MBbls
    • U.S. Distillate Inventories: – 1,538 MBbls
    • U.S. Refinery Utilization: + 0.52% change
  • Strong LNG and ResComm demand combined with lower U.S. natural gas production last week, likely resulted in another gas storage withdrawal of over 100 Bcf in mid-December
    • A survey of analysts expect the EIA to report a 162 Bcf withdrawal from inventory for the week ended December 18 (Bloomberg)
    • The EIA plans to release its storage report one day early this week at 9:30 CT on December 23, 2020
    • A 162 bcf draw would be about 30 bcf greater than the five-year average
  • Permian gas flows are shifting as associated gas production has been reduced and new infrastructure starts service
    • A 3.8 Bcf/d or about 30%, decline in Permian gas production came as the oil-market crumbled in 2020 (Platts)
    • Lower pipeline utilization rates, in combination with higher Waha gas prices, have and are changing Permian market dynamics, according to Platts
    • Gas flows out of Waha have seen a reduction in flows headed North, the market of last resort for some producers in the Permian
    • The start-up of Kinder’s Permian Highway Pipeline has recently added 2.1 Bcf/d of capacity from Waha to the Houston area

Access Our Deeper Market Insights

Product Factor Matrix

Proprietary view of priced-in factors driving the market vs. potential bullish and bearish surprises.

Learn More

Trading Recommendations

Clear trading recommendations based on real market opportunities that enable clients to take action.

Learn More

Market Data

A comprehensive suite of the latest curves, spot pricing, settles, and strips to drive confident hedging decisions.

Learn More

Benchmarking and Trade Analytics

Real-time access to analyze your hedging strategy against AEGIS benchmarks and current market activity.

Learn More