December 31, 2019

December 31, 2019
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  • WTI is down 64c to $61.04/Bbl, and Brent is down 58c to $66.09/Bbl
  • Hedge funds remained bullish for the week ended December 24, increasing net bullish bets on WTI by about 5k contracts (CFTC)
    • Speculators have increased net-long positions on WTI by nearly to 279k contracts since early October from 94k contracts
    • The last time funds were this bullish was late April ‘19
  • The U.S. carried out air strikes in western Iraq and Syria in response to the death of a US contractor in a rocket attack on a US military facility near Kirkuk (Argus)
    • Air strikes targeted weapons storage facilities and a command and control center operated by Iran-backed Shia militia Kayaib Hezbollah, according to the Pentagon
    • The attacks in Iraq are the latest escalation in a string of confrontations since May, when the U.S. imposed sanctions that cut Iran’s oil exports by more than 2 MMBbl/d
  • A Reuters poll on Tuesday showed oil prices are likely to stay around $63/Bbl, benefiting from deeper production cuts from OPEC+
    • Respondents were mostly optimistic about crude oil prices in the near term, but none of the analysts polled expect benchmark Brent prices to hit the 2019 high of $75.60/Bbl (Reuters)
  • Natural gas is down 0.6c to $2.180/MMBtu
  • The CFTC reported total short positions grew 12,290 contracts to total 372,577 contracts
    • Long positions grew 4,912 contracts to total 127,226 contracts
    • The number of contracts managed money has held short is at the highest level since September 2015
  • Prompt-month gas prices are flat compared to yesterday despite losing 16 Heating Degree Days (HDD) overnight as the 11-to-15-day outlook continues to trend warmer
    • January HDD estimates for 2020 are currently around 892 HDDs, according to Commodity Weather Group
    • One HDD is roughly equivalent to 1.8 Bcf during the winter

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