February 13, 2020

February 13, 2020
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  • WTI is up 15c to $51.32/Bbl, and Brent is up 6c to $55.85/Bbl
  • The number of confirmed virus cases in Hubei province China jumped by 14,840 to 48,206 on February 12 and deaths climbed by a daily record of 242 to 1,310 (Reuters)
    • The jump in new cases reflect changes to the diagnostic methodology
    • Oil demand in the world’s second-biggest crude consumer has plunged because of travel restrictions and mandated quarantines
    • Asia has seen a 10.5% slowdown in outbound travel bookings for March and April (excluding trips to and from China and Hong Kong), according to travel analytics firm ForwardKeys
  • Global oil demand will drop for the first time in over a decade as the coronavirus hits China’s economy, the International Energy Agency (IEA) said (Bloomberg)
    • World fuel consumption is expected to contract by 435 MBbl/d during the three-month period, compared to a year earlier
    • The IEA’s previous monthly report forecasted 800 MBbl/d in world fuel demand
    • The virus will curb annual growth in global consumption by about 30% to 825 MBbl/d for all of 2020, the lowest since 2011
  • The Energy Information Agency (EIA) reported a large build in crude inventories of 7.5 MMBbl for the week ending February 7
    • Domestic crude production averaged 13 MBbl/d, returning to a record high, according to the EIA
      • Output was up 100 MBbl/d compared to the previous week
  • Natural gas is up 1.6c to $1.860/MMBtu
  • February’s two-week outlook continues to project cold over the next one-to-three days, and then again in days seven through nine (Commodity Weather Group)
    • The effects of the first cold snap can already be seen as natural gas imports into the United States jumped nearly 1 Bcf to total 6 Bcf.
    • The February HDD estimate is currently at 709, compared to the 10-year average of 766 HDDs, 2020 is slightly outside consideration for being considered a top-10 warmest February on record now
  • Analysts estimate a -108 Bcf withdrawal for the week ending February 7, this would be larger than the -101 Bcf withdrawal for the corresponding week last year
    • Analyst estimates ranged from a low of -100 Bcf to a high of -120 Bcf
    • A withdrawal within this range would reduce total storage numbers to 2.5 Tcf and increase the surplus, to the five-year average, to 222 Bcf

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