- WTI is up $1.35 to $50.96/Bbl, and Brent is up $1.51 to $55.46/Bbl
- West Texas Intermediate have bounced from yesterday’s sub $50/Bbl settle on news that scientist have developed a drug against the fast-spreading coronavirus (Reuters)
- Chinese media reported on Tuesday that a team of researchers have found that drugs Abidol and Darunavir can inhibit the virus in vitro cell experiments
- Sky news reported that a British scientist has made a breakthrough by reducing the part of the normal development time from two to three years to only 14 days
- The World Health Organization commented on the media reports that there are “no know effective therapeutics” against the virus
- The technical sub-committee of OPEC is meeting in Vienna on February 4-5. Saudi Arabia is pushing for a output cut of at least 500 MBbl/d and even up to twice that amount, according to OPEC delegates
- The possibility of deeper cuts from OPEC to offset the demand destruction caused by the virus outbreak is helping to push crude oil higher this morning
- EIA weekly data is due at 9:30 AM CST
- U.S. Crude Inventories: + 2,876 MBbls (Bloomberg surveys)
- U.S. Gasoline Inventories: + 1,696 MBbls
- U.S. Distillate Inventories: – 239 MBbls
- U.S. Refinery Utilization: + 0.01% change
- Natural gas is down 3.9c to $1.833/MMBtu
- Waha’s steep prompt-month basis decline could be the result of capacity constraints on the El Paso Natural Gas pipeline heading into Southern California
- Flows on the line are down as much as 400 MMcf, according to PointLogic, a noticeable amount when considering the lack of takeaway capacity that has plagued the basin
- Despite constraints impacting the prompt-futures contract, spot prices are up over $1.00/MMBtu due to a splash of winter weather that has managed to bring snow into West Texas
- North Asia LNG buyers are seeking to purchase spot cargoes below $3/MMBtu for delivery in March and April (Bloomberg)
- JKM spot prices, Asia’s LNG price benchmark, are at their lowest levels in the past decade
- AEGIS notes that low international prices could provide an economic incentive for domestic LNG trains to undergo maintenance during the spring shoulder season, we have this as a potential risk to our bullish natural gas outlook
