February 23, 2021

February 23, 2021
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  • WTI is up 39c to $62.09/Bbl, and Brent is up 39c to $65.63/Bbl
  • Texas refiners begin to restart refineries, assess damages
    • At least seven different refineries were trying to restart on Monday, according to Bloomberg
    • It could still take several weeks to get refineries up and running, supporting gasoline prices in the near-term. Processing capacity fell by an estimated 5.5 MMBbl/d during the height of the freeze
    • At least three tankers signed up to ship gasoline and jet fuel to the U.S. last week, in contrasts with one tanker in January. The downed refineries have caused gasoline prices to rally, opening an arb opportunity for Asian producers
  • Trafigura sees oil markets tightening in the coming months
    • The trading group cited the underestimation of last week’s freeze on oil supply, coupled with an improving demand picture from the vaccine rollout, as drivers of the forecasted tightness
    • An estimated 40MMBbls of February output will not be produced this month, with refined products following suit
  • BofA calls for Brent ceiling of $70/Bbl this year
    • OPEC+ cuts were responsible for removing an estimated 180 MMBbls in 1Q2021. The freeze in Texas should reduce global inventories by an additional 50 MMBbls
    • The bank expects the global benchmark to average between $50-$70 through 2026, mentioning prices could spike to $100 during that period on global stimulus and an improved supply and demand outlook
  • Natural gas is down 4.8c to $2.905/MMBtu
  • Natural gas prices turned lower on Tuesday morning as weather models further moderated with a loss of 2.2 HDDs, according to CWG
    • The Northeast and interior of the U.S. saw warmer near-term changes. The 6-10 day window of the forecast showed a warmer East and South
  • Total Lower 48 gas production remains nearly 5 Bcf/d lower than the 30-day average, according to PointLogic (PL)
    • PL models show Texas still off by 1.5 Bcf/d and the Midcon down 1.2 Bcf/d from their 30-day averages
  • FERC to probe wholesale gas and power market activity to “determine if any market participants engaged in market manipulation or other violations” (Platts)
    • Richard Glick, FERC chairman, had already announced on Feb. 16 that the commission would open a joint inquiry into bulk power system operations in the region during the usual period. The inquiry aimed to find problems with performance of the bulk power system
    • Missouri lawmakers sought probe of gas supplies and rates in the Southwest Power pool
    • In Texas, Attorney General Ken Paxton issued a civil investigative demands to ERCOT and several market participants regarding “power outages, emergency plans, energy pricing”

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