December 27, 2019

December 27, 2019
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  • WTI is up 10c to $61.78/Bbl, and Brent is up 5c to $67.97/Bbl
  • Russia has come out and said OPEC+ may consider ending production cuts in 2020, according to Reuters
    • Novak, Russia’s Energy Minister, stated that these reductions were never an “indefinite process” and that a decision to exit needs to be planned
    • OPEC+ has been curbing output since 2017 in order to balance global markets
  • Despite rig count declining 60% in the SCOOP-STACK region, oil production is expected to top 488 MBbls/d (Platts)
    • While oil production has risen year-over-year, gas production fell 0.5 Bcf/d during the same time period
    • Rig count in the SCOOP-STACK is at the lowest level since 2016
  • Natural gas is down 8.2c to $2.212/MMBtu
  • Weather is forecasted to remain hotter-than-normal over the next ten days, especially on the East Coast, helping to keep prompt-month gas prices in the $2.20/MMBtu range
    • Spot prices reflect this reality as many major basis locations are at, or below, $2.00/MMBtu as of yesterday’s settle; Waha is at $0.33/MMBtu
    • The Winter ’20 ’21 strip is at $2.55/MMBtu, the lowest it has been since late August
  • Three major Brownsville, Texas-based LNG projects are facing environmental backlash and requests for re-hearings (Platts)
    • These projects include the 0.8 Bcf/d Annova LNG facility, the 0.5 Bcf/d Texas LNG facility, and the 3.5 Bcf/d NextDecade Rio Grande facility
    • Environmental litigation has the potential to delay the start dates for these projects should the opposition prove warranted

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