January 22, 2020

January 22, 2020
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  • WTI is down 64c to $57.74/Bbl, and Brent is down 52c to $64.07/Bbl
  • Oil prices are weaker this morning as the supply surplus forecasted by the International Energy Agency (IEA) outweighs concerns over lost supply in Libya (Reuters)
    • Fatih Birol, the head of the IEA, said he expects the market to be in surplus by 1 MMBbl/d in the first half of the year
    • “It’s the reason that recent incidents we have seen – with the Iranian general killed, Libya unrest – didn’t boost international oil prices,” Birol said
    • AEGIS notes that unless supply is perceived to be disrupted for a prolonged period of time, oil prices are unlikely to respond higher for more than a few days
  • Guyana’s first cargo of Liza crude is en-route to the US Gulf coast (Argus)
    • Aboard the Suezmax Yannis P, the 1 MMBbl shipment of medium sweet crude departed Monday from a the floating production and storage and offloading (FPSO) vessel Liza Destiny
    • The cargo is headed to Galveston, Texas, likely for processing at ExxonMobil’s 557 MBbl/d refinery in Baytown, Texas
    • Liza has a preliminary 32.1°API and 0.51% sulfur crude content that is likely to compete with Brazilian crudes, according to Argus
    • The Liza field is expected to reach 120 MBbl/d in the first quarter of 2020, while the whole Stabroek block as a whole will produce at least 750 MBbl/d in 2025
    • AEGIS notes that Guyana is one of the contributors of non-OPEC supply growth in 2020, along with the U.S. and Norway
  • Natural gas is up 1.3c to $1.908/MMBtu
  • After losing 110 HDDs over the last week and a half, roughly the equivalent of 200 Bcf of demand, prompt-month gas prices are hovering just above $1.90/MMBtu
    • This is the third warmest January of all time, according to the Commodity Weather Group, based on the latest HDD forecast
    • Total HDDs for January are forecasted to come in at 792, the 30-year normal is 952
  • JKM spot prices, Asia’s LNG price benchmark, now stand at $4.10/MMBtu, a fresh multi-year low
    • Countries like Egypt, who rely heavily on the spot market, are now starting to reduce the number of LNG cargos they offer according to Egypt’s Oil Minister
    • IHS notes a record 5.6 Bcf/d of global liquefaction facilities reached FID without securing long-term off-take contracts

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