January 14, 2021

January 14, 2021
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  • WTI is trading slightly lower this morning as grim Chinese import data offset encouraging OPEC+ data
    • The dollar index (DXY) bounced from its intra-week low of $90 by 50 pips to $90.509
    • The EIA reported a drawdown in inventories of 3,248 MMBbls, in contrasts with the average Bloomberg survey estimate of 1,930 MMBbls
  • OPEC+ cuts contribute to declining global inventories (Bloomberg)
    • IF OPEC maintains adherence to the cuts, the cartel will pump an average of 25 MMBbl/d, well below the 26.79 MMBbl/d required to balance the market. According to the report, inventories should decline at a rate of 1.8 MMBbl/d
    • OPEC’s 2021 forecast remained the same; however, the group foresees a tighter 1Q2021 as consumption returns while rival output slows
  • Chinese imports data shows 2020 was a record-year for energy imports (General Administration of Customs Data – PRC)
    • Coal and gas shipments showed a surprise-surge in December, bringing the annual total to 300 MM Tons, its highest since 2013
    • Total oil imports saw a 7% year-over-year increase in 2020. Still, concerning data came out showing China crude imports reached a 27-month low of 9.096 MMBbl/d in December
  • Nymex gas prices are steady Thursday morning as weather models remain mostly unchanged overnight and the market awaits the EIA’s storage data
    • Cooler temperature changes were concentrated in the Northeast within the 6-10 day window while the end of January time-frame shows gains in anomalous warmth in the Southeast U.S.
    • For the next 15 days there was a minor increase in overall heating degree days of 0.6 (~1.2 bcf)
  • Regulators in the U.S. have given the green light for work to begin on nearly all of the route of the 125-mile Double E Pipeline that would connect gas-rich areas of the Permian’s Delaware basin to Waha Hub
    • The Summit Midstream owned pipe will transfer up to 1.35 Bcf/d and connect to Kinder Morgan’s Gulf Coast Express and Permian Highway Pipelines (PHP) as well as Energy Transfer’s Transo-Pecos Pipeline
    • Connecting to these long haul pipelines will allow the gas to reach downstream markets on the Texas Gulf Coast
    • Waha gas prices have already greatly improved recently and much of that improvement has come with the addition of PHP. Cash Waha reached a six-week high of $2.70/MMBtu on January 13

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