January 15, 2020

January 15, 2020
Share
Print Friendly, PDF & Email
  • WTI is down 14c to $58.09/Bbl, and Brent is down 20c to $64.29/Bbl
  • Oil is trading near six-week lows and hovering just above the 200-day moving average as industry data showed an in increase in U.S. stockpiles
    • The American Petroleum Institute showed a weekly build of 1.1 MMBbl on Tuesday for the week ending January 10
    • Major energy agency’s like the EIA have been forecasting over-supply in at least first half of the year
      • This projected imbalance between supply and demand is weighing on crude oil prices
  • A Permian Basin oil production slowdown won’t be a severe or swift as some shale executives are forecasting, according to BloombergNEF
    • A sample of seven large independent Permian heavy drillers are targeting 12% production growth for 2020, based on the median for the group (Bloomberg)
    • The Permian as a whole expanded by 17% as a whole in 2019
    • The projected growth comes as Permian rigs are down to 397 active rigs, down from 488 a year ago (Baker Hughes)
  • EIA weekly data is due at 9:30 AM CST
    • U.S. Crude Inventories:                  +        384 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:             +     3,389 MBbls
    • U.S. Distillate Inventories:             +     2,023 MBbls
    • U.S. Refinery Utilization:               –      0.26% change
  • Natural gas is down 5.7c to $2.130/MMBtu
  • Prompt-month gas prices took a major hit as European weather models subtracted 20 Heating Degree Days yesterday and another 10 Heating Degree Days overnight
    • This was the biggest 24-hour degree day change of the winter so far
    • The biggest shift came in the 9-to-13-day outlook, i.e. the transition period, from last late last week’s forecasts, where the 6-to-10-day outlook was expected to flip considerably colder by the 11-to-15-day outlook
    • One Heating Degree Day is roughly equivalent to 1.8 Bcf of demand
    • Gas prices are down 5.3% from yesterday’s intraday peak of $2.25/MMBtu
  • The EIA expects gas prices to average around $2.33/MMBtu in 2020 before rising to average $2.57/MMBtu in 2021
    • Production is forecasted to increase to 94.7 Bcf/d in 2020, but decline slightly to 94.1 Bcf/d in 2021
    • Should 2021 projections come to fruition, that would mark the first production decline since 2016
    • The EIA noted that they expect the Appalachia region to drive their production forecasts citing growth through 2020, but declining production in 2021

Access Our Deeper Market Insights

Product Factor Matrix

Proprietary view of priced-in factors driving the market vs. potential bullish and bearish surprises.

Learn More

Trading Recommendations

Clear trading recommendations based on real market opportunities that enable clients to take action.

Learn More

Market Data

A comprehensive suite of the latest curves, spot pricing, settles, and strips to drive confident hedging decisions.

Learn More

Benchmarking and Trade Analytics

Real-time access to analyze your hedging strategy against AEGIS benchmarks and current market activity.

Learn More