January 29, 2021

January 29, 2021
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  • WTI is on track for a small weekly gain of around 50c
    • Price action has been mixed over the last week with WTI trading within a narrow range. Bearish news emerged of increased lockdowns around the world due to a new COVID-19 variant emerging out of South Africa. A rally in the dollar pressured prices further
    • The curve has become more backwardated as prompt time-spreads firmed, implying that demand in the future will outweigh supply, making a cash-and-carry trade more profitable
  • OPEC output rose by 250 MBbl/d in January to a total of 25.6 MMBbl/d (Bloomberg)
    • Saudi Arabia increased its production by 120 MBbl/d to 9.12 MMBbl/d
    • Iran increased its production by 100 MBbl/d to 2.1 MMBbl/d
    • Iraq trimmed its production by 110 MBbl/d to 3.75 MMBbl/d
  • Libya’s Petroleum Facilities Guards (PFG) set a new salary deadline to avert a discontinuation of exports
    • The PFG will allow exports until the deadline passes, at which time if a deal has not been reached, they will shut down two of the countries largest export terminals
  • Natural gas prices dipped intraday on Thursday after the EIA reported a smaller than expected change in working gas stocks
    • Gas prices eventually recovered into yesterday’s close despite the 128 Bcf draw reported by the government coming in less than analysts’ estimates of 134 bcf withdrawal
    • Storage inventories now stand at 2.881 Tcf for the week ended January 22. Storage volumes now stand at 78 Bcf, or 3%, more than the year-ago level of 2.803 Tcf and 244 Bcf, or 9%, more than the five-year average of 2.637 Tcf
  • A senior official from the International Energy Agency (IEA) says the spike in Asian LNG demand in January is not an indicator of a “major” global demand rebound for the remainder of 2021
    • The agency expects a small recovery in global gas demand this year after a decline in 2020 due in part to the coronavirus pandemic, according to the Jean-Baptiste Dubreuil at the IEA
    • In January, JKM spot Asian LNG price hit an all-time high of $32.50/MMBtu as Asian LNG demand rose sharply in early January as temperatures plummeted
    • According to the IEA, gas demand in 2020 fell by 2.5%, or by an estimated 100 Bcm, to around 3.91 Tcm – the largest ever recorded drop in gas consumption. Demand this year is forecasted at 4.021 Tcm, according to the EIA
  • Outrigger Energy II recently completed its 200 MMcf/d Bill Sanderson Gas Processing Plant in Williams County, North Dakota in the Williston Basin (PointLogic)
    • The processing plant will have direct access to the Northern Border Pipeline system for residue gas and the ONEOK NGL pipeline system for natural gas liquids, according to Outrigger
    • AEGIS notes that additional Bakken gas processing can elevate gas production levels even if crude oil production stays flat. This can put more gas into the Midwest and other regions assuming the additional gas isn’t displacing further upstream volumes from Canada

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