January 21, 2020

January 21, 2020
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  • WTI is down 55c to $57.99/Bbl, and Brent is down 84c to $64.36/Bbl
  • Oil prices are down over 1% this morning as a well-supplied market overshadows disruption levels in Libya (Bloomberg)
    • Libyan ports have been closed by the militia leader Khalifa Haftarwhile as he disputes with the government
    • Almost all of Libya’s crude export capacity in now under force majeure (Reuters)
    • Oil exports from Libya had been hovering just above 1 MMBbl/d as of December and are estimated to be down by about 800 MBbl/d
  • The world’s three largest oil-market forecasters have differing views on how supply and demand with shake out this year (Bloomberg)
    • Both the International Energy Agency (IEA) and the Energy Information Agency (EIA) forecast global inventory levels to rise
    • In contrast, OPEC’s own research team predict that deeper OPEC+ cuts will continue to reduce global stockpiles throughout 2020
  • Natural gas is down 6.5c to $1.938/MMBtu
  • Prompt-month gas prices dipped as low as $1.91/MMBtu, during overnight trading, as the European weather models forecast extended warmth through the next two weeks
    • Weather models subtracted 43 Heating Degree Days since Friday
    • The CFTC reported that managed money short positions rose to an all-time high of 426,210 total contracts, roughly 73% of all open positions
    • AEGIS notes that gas could see some added demand from coal-to-gas switching with prices at these levels
    • AEGIS internal models suggest that demand noticeably ramps up around $1.70-$1.75/MMBtu, but could be slightly higher when factoring in costs associated with turning on a power plant
  • FERC will rehear its authorization cases for the 3.6 Bcf/d Rio Grande LNG project and accompanying Rio Bravo pipeline, as well as rule on the 1.1 Bcf/d PennEast Pipeline and 0.3 Bcf/d Buckeye Express replacement (Platts)
    • The Rio Grande LNG project is one of three facilities recently approved by FERC to begin construction in the Brownsvillle Ship Channel in South Texas
    • The PennEast pipeline runs from eastern Pennsylvania into the northern portion of New Jersey and has been significantly delayed due to eminent domain disputes
    • The Buckeye Xpress runs from the southern tip of Ohio into West Virginia

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