December 29, 2020

December 29, 2020
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  • Oil demand recovery remains likely to extend through 2022, according to Russian deputy prime minister Alexander Novak
    • Novak said, “oil demand levels are still around 7- 8 MMBbl/d lower than 2019 levels”, “We hope to reach pre-pandemic levels in 2021; However, we only expect growth of around 6 – 7 MMBbl/d
    • Novak said he hopes the group can raise production by 500 MBbl/d each month to reach 2 MMBbl/d by the end of 1Q2021
  • Libya plans to export 785 MBbl/d in January (Bloomberg)
    • The 785 MBbl/d figure excludes the Hariga and Zuetina terminals, which account for 258 MBbl/d and 94 MBbl/d in December, respectively
    • Last month’s export numbers were around 718 MBbl/d in December when excluding the Hariga and Zuetina terminal exports
  • Iraq exports 2.7 MMBbl/d in December
    • The country’s oil ministry has plans to double 4 MMBbl/d export capacity
    • The country has announced intent to remain fully compliant with the OPEC output quota
    • OPEC’s second-largest producer pumped 3.685 MMBbl/d in November, below its 3.804 MMBbl/d quota
  • Prompt-month Waha is printing positive for the first time in five years
    • The price improvement appears to be primarily limited to the prompt-month contract as it has risen $0.18/MMBtu since December 25
    • The Waha/Panhandle spread is currently at its highest level since April 2015 as Panhandle has temporarily stopped being the resistance to Waha pricing in the near term
  • Sinopec is planning to raise imports of LNG to record rates as colder weather hits the country (Reuters)
    • China has reported power crunches in 3 northern provinces since early December, as an economic recovery, cold weather, as well as supply bottlenecks sent power loads at grids to near record-highs (NASDAQ)
    • Asian demand has helped drive JKM pricing over $10.00/MMBtu this winter while also likely helping U.S. LNG feedgas demand average 11.00 Bcf in December
    • Platts JKM, the benchmark for spot-traded LNG in East Asia, reached a 6-year high, closing at $12.514/MMBtu on December 28
    • Falling domestic prices in the U.S. along with rising prices in Asia have widened the spread, causing LNG to creep toward maximum capacity as feed gas rates reached 11.31 Bcf for December 29
  • Platts JKM, the benchmark for spot-traded LNG in East Asia, reached a 6 year high, closing at $12.514/MMBtu on December 28
    • Falling domestic prices in the U.S. along with rising prices in Asia have widened the spread, causing LNG to creep toward maximum capacity as feed gas rates reached 11.31 Bcf for December 29

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