February 20, 2020

February 20, 2020
Print Friendly, PDF & Email
  • WTI is up 42c to $53.71/Bbl, and Brent is up 21c to $59.33/Bbl
  • Oil near one-month highs as Brent crude continues its longest uninterrupted run of gains since January 2019
    • The oil complex is hopeful that Chinese economic stimulus will cushion fuel demand from the impact of the viral outbreak (Bloomberg)
    • China cut its benchmark lending rate on Thursday and only reported 349 new confirmed cases in Hubei province on Wednesday, the lowest in more than three weeks
  • Prices are also supported by new American sanctions on Rosneft’s trading arm that could impede shipments from Venezuela
    • Venezuela’s oil production fell to 750 MBbl/d last month, according to Argus
    • The OPEC nation’s production has already fallen by 450 MBbl/d from January 2019 when the U.S. imposed sanctions that prohibited imports of Venezuelan crude into the U.S. (Argus)
    • AEGIS notes that the combination of possible lower Venezuelan exports and the continued reduction in Libyan production has help offset some demand loss from the coronavirus
  • EIA weekly data is due at 10:00 AM CST
    • U.S. Crude Inventories:                  +     2,824 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:             +        225 MBbls
    • U.S. Distillate Inventories:             –     1,297 MBbls
    • U.S. Refinery Utilization:               –     0.50% change
  • Natural gas is down 1.1c to $1.944/MMBtu
  • Analysts estimate a withdrawal of -141 Bcf for the week ending February 14, this would be less than the -163 Bcf withdrawal in the corresponding week last year
    • Estimates ranged from a draw of -121 Bcf to a draw of -154 Bcf
    • A withdrawal within this range would contract the five-year average to 210 Bcf
  • Shell sees the LNG market well-supplied into the middle of 2020, but things could balance out by the end of the year (Bloomberg)
    • Despite the oversupplied market, volumes that were supposed to go to China are being picked up by other countries such as India or South Korea
    • Europe absorbed roughly 90% of LNG growth in 2019, but southern Asia and South America could be set to provide some relief moving forward

Access Our Deeper Market Insights

Product Factor Matrix

Proprietary view of priced-in factors driving the market vs. potential bullish and bearish surprises.

Learn More

Trading Recommendations

Clear trading recommendations based on real market opportunities that enable clients to take action.

Learn More

Market Data

A comprehensive suite of the latest curves, spot pricing, settles, and strips to drive confident hedging decisions.

Learn More

Benchmarking and Trade Analytics

Real-time access to analyze your hedging strategy against AEGIS benchmarks and current market activity.

Learn More