February 19, 2020

February 19, 2020
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  • WTI is up 64c to $52.69/Bbl, and Brent is up 83c to $58.58/Bbl
  • Oil moved to a two-week high on hopes that economic stimulus from China can revive some demand loss by the coronavirus (Bloomberg)
    • The Bloomberg report said that Beijing was considering cash injections or mergers to bail out airlines hit by demand loss
    • China also reported the lowest daily rise of new virus cases since late January, helping lift the yuan to tow-week highs against the dollar
  • Libya’s oil production continues to remain restrained as a port blockade restricts waterborne exports
    • The OPEC nation’s oil production has fallen to 123 MBbl/d as of February 18, the state-run NOC said on its Facebook page
    • Before the blockade, Libya’s output was about 1.2 MMBbl/d
    • AEGIS notes that the market is likely discounting the effect of Libya’s outage as China’s coronavirus dominates concerns
  • EPIC Midstream is in talks to build a new pipeline that would move crude from Houston to Corpus Christi, Texas (Bloomberg)
    • The novel route comes as shippers seek ways to avoid congested waterways around Houston
    • Corpus Christi (CC) is now a popular port for oil exports since new pipelines came online connecting CC to the Permian basin
    • Corpus can also accommodate larger tankers than Houston, lending to better shipping economics
  • Natural gas is down 1.6c to $1.965/MMBtu
  • China will start accepting tariff exemption applications on products such as LNG and propane
    • The exemptions will last one year and will help China meet their $50 billion purchase agreement of U.S. energy supplies as part of the phase 1 trade-war deal
    • Exemptions will only be granted for purchases that are deemed economically and commercially viable
  • The EIA is projecting a fourth straight month of production declines from Appalachia and a third straight month of net declines for all major shale basins
    • AEGIS notes that even in the best-case scenario for gas prices, we forecast production growth to remain moderate in 2020
  • LNG feed gas receipts jumped 0.6 Bcf, to total 8 Bcf, as Cameron is likely nearing completion of their commissioning related work for their second train

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