February 12, 2020

February 12, 2020
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  • WTI is up $1.18 to $51.12/Bbl, and Brent is up $1.52 to $55.53/Bbl
  • Oil and equity prices are higher this morning as China reported its lowest daily number of new Covid-19 cases since late January
    • Experts are still cautious about forecasting when the outbreak might reach a peak (Reuters)
    • The U.S. Energy Information Administration (EIA) on Tuesday cut its global oil demand growth forecast for 2020 by 310 MBbl/d as the viral outbreak dampens oil consumption in China
  • OPEC cut its forecast for global oil demand as Covid-19 hits fuel demand in China (Bloomberg)
    • The group reduced projections for demand growth 1Q by 440 MBbl/d, or about a third, in its monthly report
    • OPEC leaders have suggested that OPEC+ further reduce supply by 600 MBbl/d, but still await Russia’s response
  • EIA weekly data is due at 9:30 AM CST
    • U.S. Crude Inventories:                  +     3,245 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:             +        635 MBbls
    • U.S. Distillate Inventories:             –        675 MBbls
    • U.S. Refinery Utilization:               –     0.28% change
  • Natural gas is up 3.7c to $1.825/MMBtu
  • Gas demand from China is expected to grow by roughly 4% to 6%, in 2020, as industrial and commercial sectors continue to bear the brunt of the coronavirus’ impact (Reuters)
    • Chinese gas demand growth, for 2019, is estimated to come in closer to 10%
    • Industrial activity in mainland China could be depressed for the next several months following the outbreak
  • Cameron confirmed that the reduction in LNG feed gas flows were related to commissioning activity on their second train
    • Maintenance on the Creole Trail gathering system/Gillis Compressor Station, which serves the Sabine Pass, could also be contributing to cash prices remaining flat at NGPL TxOK
    • LNG feed gas demand remains reduced at 8.3 Bcf and should see continued reduction for the next week or so

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