January 6, 2020

January 6, 2020
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  • WTI is up 82c to $63.87/Bbl, and Brent is up 99c to $69.59/Bbl
  • Brent briefly moved above $70/Bbl earlier this morning for the first time since September. Middle East tensions rose after the U.S. took out one of Iran’s top generals
    • Oil prices are staying elevated as the U.S. State Department warned of a “heightened risk” of missile attacks near energy facilities in Saudi Arabia (Bloomberg)
    • President Trump has promised retaliation should Iran “do anything”
  • Trump also said he would enact heavy sanctions against Iraq if American troops are forced to leave the country
    • Iraq’s parliament voted in favor of expelling American forces in response to the U.S. killing the Iranian general at their airport
    • Trump said that unless the U.S. exits Iraq on a “friendly basis,” the U.S. “will charge them sanctions like they’ve never seen before ever” (WSJ)
  • U.S. crude exports jumped to a record high of about 4.5 MMBbl/d last week, helping cause a large drop in inventories, according to the EIA
    • The previous record high was about 3.8 MMBbl/d in mid-June
    • Crude inventories fell by a whopping 11.5 MMBbl to 429.9 MMBbl for the week ending December 27 , in the largest weekly decline since mid-June
    • On Friday, Baker Hughes reported a drop of seven oil rigs to 670 last week
  • Natural gas is up 2.8c to $2.158/MMBtu
  • Permian gas production averaged 11.49 Bcf/d in December, an increase of nearly 2 Bcf/d compared to last year (Platts)
    • The Haynesville also averaged 5.38 Bcf/d in December, an increase of 0.6 Bcf/d compared to last year
    • Bakken gas processing capacity is also planned to increase by 0.4 Bcf/d in early 2020
  • Energy Transfer is allowed to resume construction on the 345 MBbls/d Mariner East 2 after paying a fine of $30 million due to environmental damages (PGJ)
    • The settlement lifts a year-long, statewide, moratorium on construction permits that were imposed on Energy Transfer
    • The NGL pipeline runs across the southern half of Pennsylvania
  • The EIA reported a withdrawal of -58 Bcf for the week ending December 27 on Friday, this was stronger than the -24 Bcf withdrawal in the corresponding week last year
    • However, this withdrawal was a far cry from the -161 Bcf withdrawal in the previous week as mild temperatures persist in the United States
    • Total storage is currently 484 Bcf above last year’s numbers of 2.71 Tcf

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