February 2, 2021

February 2, 2021
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  • WTI touched $55/Bbl in overnight trading for the first time in over a year
    • OPEC Joint Technical Committee paints bullish outlook in yesterday’s meeting
    • January OPEC production comes in below estimates as turmoil in OPEC nations disrupts output
    • China demand growth is poised for a slowdown (Platts)
  • OPEC+ Joint Technical Committee estimates global stockpiles will go below the five-year average in 2Q2021
    • The committee estimate that global oil stockpiles will diminish at an average rate of 1.1 MMBbl/d in 2021
    • The JTC estimates assume that OPEC+ production will rise by 0.5 MMBbl/d each month from April to June
  • OPEC’s output increase was smaller than expected in January, with Bloomberg reporting that output only increased by 190 MBbl/d, in contrast with the planned hike of 250 MBbl/d
    • Disruptions in Nigeria and Libya were primarily responsible for the lag
    • OPEC output from OPEC 13’s members averaged 25.6 MMBbl/d in January, according to Bloomberg
  • China’s crude demand growth to slow in 2021
    • After importing 10.86mmbbl/d of crude, a growth of 707mbbl/d in 2020 and a 7 percent y-o-y growth rate, analysts do not expect this growth to continue with prices rebounding and few plans for capacity growth (Platts)
    • China’s crude storage hit record highs in 2020, touching over 940mmbbl
  • Natural gas prices continue bullish price action on Tuesday morning with the March contract up 13c to nearly $3.00/MMBtu
    • Weather models showed another round of strong demand gains over the past 24 hours with the GFS ensembles gaining 50 HDDs (~100 Bcf) while the European gained 31 HDDs, according to Commodity Weather Group. The variety of models are now in better agreement which gives the cold forecasts better validity
    • The Summer 2021 strip (Apr-Oct) at $2.95 is the highest since November 2
    • The Winter 2021/2022 strip (Nov-Mar) at $3.12 the highest since November 13
      • Prices are as of 6:45 AM
  • China edged out Japan as the top destination for U.S. LNG in January for the second month in a row (Platts)
    • The flurry of vessels heading to China came amid record-high Asian spot prices even as the Panama Canal had delays
    • Deliveries last month of 14 cargoes (~36 Bcf) to China tied China’s December number as the most cargoes ever delivered from the U.S. in a single month to one country
    • LNG arbitrage for early February show incentives for U.S. LNG to flow toward Europe versus Asia right now, especially with Canal constraints, according to Platts
    • See AEGIS’s latest U.S. LNG overview here

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