January 27, 2020

January 27, 2020
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  • WTI is down $1.66 to $52.53/Bbl, and Brent is down $1.82 to $58.87/Bbl
  • Oil prices are down by about 3% in early Monday trading as the spread of the coronavirus in China raises concerns about the global economy
    • Officials in China announced nearly 3,000 confirmed cases of pneumonia caused by the virus (S&P)
    • There are almost 6,000 confirmed cases with 80 dead, according to China’s state-run Xinhua News Agency
    • The spread of the virus causes limited travel and businesses to shut down, increasing expectations of slowing oil demand
  • Saudi Arabia said it is “closely monitoring” the impact of China’s viral outbreak in the oil market, but believes the crisis will have a “very limited impact” on global demand (Bloomberg)
    • The Saudi Energy Minister Prince Abdulaziz bin Salman Al-Saud said markets are being “primarily driven by psychological factors and extremely negative expectations adopted by some market participants despite very limited impact on global oil markets”
    • The Prince also said that OPEC+ “has the capability and flexibility needed to respond to any developments…”
  • Drilling rigs targeting oil in the U.S. rose by three to 676 last week, the highest in a month, according to Baker Hughes
    • The Permian added the most of the shale plays at two to now total 405
  • Natural gas is up 6.3c to $1.956/MMBtu
  • The CFTC reported that managed money short positions advanced by 41,089 contracts to total 467,299, a fresh record-high of shorts
    • Managed money long positions also increased by 14,674 contracts to total 169,755 contracts
  • The Magnolia LNG project received its final environmental impact statement to increase its planned capacity from 1 Bcf/d to 1.2 Bcf/d
    • FERC plans to issue a certificate decision for the facility by April 23, 2020
    • The company continues to market the project as it wants to sign up 100% of capacity under long-term contracts before it commits to a Final Investment Decision
  • Cameron LNG has applied for a six-year in-service extension for its planned two-train expansion project
    • A Final Investment Decision on the expansion project is currently planned for mid-2021
    • The project will increase Cameron LNG’s export capacity to approximately 3.25 Bcf/d

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