January 3, 2020

January 3, 2020
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  • WTI is up $2.16 to $63.34/Bbl, and Brent is up $2.41 to $68.66/Bbl
  • Oil prices surged following a U.S. air strike in Baghdad that killed the head of Iran’s elite Quds Force (Reuters)
    • The air strike on Friday at the Baghdad Airport was ordered by President Trump
    • Major-General Qassem Soleimani, the Iranian killed in the strike, was the architect of Iran’s spreading military influence in the Middle East and a hero among many Iranians and Shi’ites in the regions (Reuters)
    • The attack raises concerns for an escalation in the region and possible disruption of crude supplies
    • Iran’s Supreme Leader Ayatollah Ali Khamenei vowed harsh revenge on the “criminals” who killed Soleimani
  • Prices across the whole WTI curve are higher
    • Cal 22 is up 1% this morning, Cal 21 is up almost 2%, and Cal 20 is up 3%
  • EIA weekly data is due at 10:00 AM CST
    • U.S. Crude Inventories:                  –     3,270 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:             +     1,660 MBbls
    • U.S. Distillate Inventories:             +       577 MBbls
    • U.S. Refinery Utilization:               +     0.45% change
  • Natural gas is up 1.4c to $2.136/MMBtu
  • The 15-day weather models subtracted 7 Heating Degree Days overnight, helping to send gas prices briefly below $2.10/MMBtu
    • The 11-to-15-day forecast continues to imply a warmer-than-normal weather outlook, especially on the east coast
  • Analysts estimate a -67 Bcf withdrawal for the week ending December 27, this would stronger than the -24 Bcf withdrawal in the corresponding week last year
    • Estimates ranged from a withdrawal of -54 Bcf to -78 Bcf
    • A withdrawal within expectation would place total stocks at 3.18 Tcf

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