February 3, 2021

February 3, 2021
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  • Oil is trading at its highest levels in over a year, breaching the $55/Bbl mark
    • Prices strengthened further following an American Petroleum Institute (API) reported build of 4.3 MMBbls. The EIA is set to release last week’s numbers at 9:30 am
    • Strong exports to Asia have helped push prices higher, particularly as demand slows down elsewhere. The U.S.’s largest export terminal reached a record-level for exports in January
  • American oil exports from U.S. Supertanker Port off Louisiana Port reach new record-high
    • Eight vessels departed from the port in January carrying a total of 15 MMBbls of crude from the U.S. to South Korea, China, and India
    • Total U.S. Gulf crude flows to Asia reached nearly 51 MMBbls in January
  • China’s crude inventory levels reach one-year know as global stockpiles continue to shrink
    • Chinese inventories declined for the seventh consecutive week, dropping to 990 MMBbls, according to Bloomberg
    • China reduced inventories by a record amount in December while also importing less crude, according to Government data
  • EIA weekly data is due at 9:30 am CST
    • U.S. Crude Inventories: – 971 MBbls (Avg. Bloomberg surveys)
    • U.S. Gasoline Inventories: + 914 MBbls
    • U.S. Distillate Inventories: – 246 MBbls
    • U.S. Refinery Utilization: – 0.02% change
  • Natural gas briefly traded at $3.00/MMBtu early yesterday morning, but mid-day weather models moderated to a milder forecast and Nymex gave up all gains to settle mostly unchanged
    • Overnight weather model runs showed only minor changes as only 2.1 HDDs were lost
  • Stocks of natural gas in the U.S. likely fell by the largest amount of the season in the week ended January 29 as cooler weather hit the Midwest and East
    • The EIA is expected to report a 191 Bcf withdrawal from storage on Thursday, according to the average Bloomberg consensus estimate
    • A 191 Bcf pull would be nearly 40 Bcf more than the 155 Bcf withdrawal observed last year as well as the five-year average draw of 146 Bcf
    • If the estimate is correct, gas in underground storage would decrease to 2.686 Tcf. That would reduce the overhang to 2020 to only 38 Bcf
  • President Biden’s new energy secretary nominee Jennifer Granholm is hinting that that new administration will be supportive of U.S. LNG exports (Bloomberg)
    • “I believe U.S. LNG exports can have an important role to play in reducing international consumption of fuels that have greater contribution to greenhouse gas emissions,” she writes
    • Granholm supports LNG but also wants the gas sector to get cleaner too – which could be a reference to flaring

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