January 2, 2020

January 2, 2020
Share
Print Friendly, PDF & Email
  • WTI is up 5c to $61.11/Bbl, and Brent is up 21c to $66.21/Bbl
  • Banks have tightened oil and gas producer’s access to capital as fracking forecasts under-perform (WSJ)
    • In the past, banks have been the fuel for record growth, but now tighter credit is set to restrict production growth in 2020 and beyond
    • Oil and gas producers expect banks to cut their revolving lines of credit by 10% as a result of reserve reviews, according to a Haynes & Boone LLP survey
    • Some banks are discounting the value of reserves by 20% (PV20) versus the normal 10% – thereby reducing borrowing capabilities
  • President Trump said earlier this week that the U.S.-China Phase 1 trade deal would be signed on January 15th at the White House (Reuters)
  • Oil output from OPEC fell last month as cartel members position themselves for deeper cuts starting this month (Bloomberg)
    • Saudi Arabia, Iraq and the UAE led the reduction in production for December
    • The Bloomberg survey showed that Saudi Arabia was producing 9.83 MMBbl/d in December, on its way to the self-imposed quota of 9.7 MMBbl/d
    • Russia however, has hit a post-Soviet high of crude and condensate production despite pledges to reduce
  • Natural gas is down 1.3c to $2.176/MMBtu
  • NYMEX U.S. gas futures finished the year down 25.5%, marking the worst yearly performance since 2014
    • The CFTC also reported the number of contracts held short by managed money is around 75%, the highest level since September 2015
  • Warmer-than-normal temperatures continue to dominate the east coast in the 11-to-15-day outlook, keeping prompt-month gas prices below $2.20/MMBtu
    • Weather models subtracted 17 Heating Degree Days overnight
    • Analysts are also only expecting a small withdrawal of -67 Bcf for the week ending December 27
    • With production still humming above 95 Bcf, prompt-month prices could continue to face extended pressures (PointLogic)

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