February 27, 2020

February 27, 2020
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  • WTI is down $1.94 to $46.79/Bbl, and Brent is down $1.85 to $51.58/Bbl
  • Oil prices continue to retreat this morning, hitting 13-month lows, as more new coronavirus cases were reported outside China
    • Some analysts are calling for almost flat growth in oil demand for 2020 due to the outbreak
      • Consultancy group Facts Global Energy forecast oil demand growth of only 60 MBbl/d this year
  • EPIC Midstream has started service on its 30-inch crude pipeline from the Permian basin to Corpus Christi, Texas
    • The initial capacity is 600 MBbl/d and will be in full service in April, according to the company
    • In the second half of 2019, EPIC converted an NGL line to move 400 MBbl/d of Permian crude to Corpus Christi
      • That line, called EPIC Y-grade, has stopped deliveries of crude and is being converted back to NGL service, according to EPIC
  • U.S. crude inventories rose 452 MBbl last week, smaller than the consensus build of almost 2 MMBbl
    • Stocks at Cushing, Oklahoma, rose by 906 MBbl to 39.1 MMBbl
    • U.S. crude exports were up by 93 MBbl/d to 3.7 MMBbl/d, an increase of about 300 MBbl/d from the same period last year
  • Natural gas is down 6.4c to $1.773/MMBtu
  • Apache Corporation is calling it quits on its Alpine High play in West Texas (Bloomberg)
    • The company has no future plans for drilling as wells yielded significantly more gas than oil
    • Pipeline bottlenecks and weak basis prices further exacerbated this situation
  • Analysts estimate a withdrawal of -158 Bcf for the week ending February 21, this would be less than the -167 Bcf withdrawal in the corresponding week last year
    • Withdrawal estimates ranged from -131 Bcf on the low end and -175 Bcf on the high end
    • A withdrawal within expectations would tighten the surplus to the five-year average to 164 Bcf and bring total stocks to 2.185 Tcf
  • The Sur de Texas-Tuxpan Pipeline has seen record volumes over the last month, reaching a peak of 950 MMcf/d on February 15 (Platts)
    • The downstream reversal of a compressor station, known as Cempoala Phase II, could help to increase U.S. exports by an additional 700 MMcf/d

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