December 24, 2020

December 24, 2020
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  • U.S. President Donald Trump vows to hold Iran “responsible” if rocket attacks persist
    • The U.S. Central Command claimed they “will hold Iran accountable for the deaths of any Americans that result from the work of these Iranian-backed rogue militia groups”
    • This comes as President-elect Biden has been open about his willingness to re-open relations with Iran, including the potential lifting of an Iranian crude embargo
    • Iran’s oil minister, Bijan Namdar Zanganeh, says the country plans to hike crude and condensate output to 4.5mn b/d in the next Iranian year that begins on 21 March, and to boost exports to 2.3mn b/d, according to Argus
  • The market received lackluster storage data from the EIA on Wednesday
    • The EIA reported a draw of (-) 562 MBbls for the week ending December 18, well above the estimate of a (-) 2,889 MBbls draw
    • Inventories for the U.S. are now at a surplus of 52.701 MMBbls to last year and a surplus of 46.99 MMBbls to the five-year average
  • Natural gas futures fell on Wednesday despite another triple-digit decrease in underground storage
    • The January contract lost 18c yesterday as the EIA reported a 152 Bcf withdrawal, decreasing inventories to 3.574 Tcf
    • Analysts were expecting a slightly better draw. The analyst survey ranged from pulls of 135 to 172 Bcf
  • Appalachian gas basis could see continued pressure in 2021 with increasing frequency, according to S&P Global Platts
    • Higher production and lack of excess takeaway capacity have already kept basis like Dominion South at heavy discounts to Henry Hub
    • Nearly every Appalachian takeaway pipeline has now reached or is nearing its capacity limit, says S&P
    • One major infrastructure project, and maybe the region’s last, is slated to come online in 2021. The 2 Bcf/d Mountain Valley Pipeline is over 90% complete, but still faces legal and permitting challenges to get it across the finish line
    • AEGIS notes that most other basis locations across the Lower 48 have been relatively strong as associated gas volumes have declined. Appalachia is one shale play that has seen its gas volumes rise to new record levels, causing locations like Dominion South to slip from about -$0.40 in early March to -$0.65 for Calendar 2021

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