January 7, 2020

January 7, 2020
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  • WTI is down 42c to $62.85/Bbl, and Brent is down 55c to $68.37/Bbl
  • Oil prices are down slightly this morning as investors weigh the likelihood of immediate supply disruptions in the Middle East in response to the U.S. killing of a top Iranian general (Reuters)
    • On Monday, Brent crude hit $70/Bbl, a level not seen since Spring 2019 excluding September attacks on Saudi Arabia
    • Iran has vowed a harsh revenge. The consultancy Eurasia Group said Iran is likely to focus specifically on US targets instead of energy targets
    • Iran is assessing 13 scenarios to respond to the US, claiming that even the weakest of those options would be a “historic nightmare” for the U.S. (Bloomberg)
  • Chevron has evacuated foreign staff from Iraq’s Kurdistan region, following escalating tensions in the region (Argus)
    • A Chevron spokesman said the company’s expatriate employees and contractors have left for the time being
    • The Iraqi oil minister said on Friday that U.S. citizens working in the fields left the country but that production was unaffected
  • Mexico has completed its annual oil hedge for 2020 at a price of $49/Bbl, according to the country’s finance ministry
    • The finance ministry’s hedge is thought to be the world’s largest oil trade
    • Pemex expects to export 1.13 MMBbl/d this year, up by nearly 2% from last year
  • Natural gas is down 0.8c to $2.127/MMBtu
  • The long delayed 0.9 Bcf/d Tuxpan-Tula project is in the process of proposing several re-routes due to the original path facing opposition by indigenous people
    • The Tuxpan-Tula project is meant to extend the reach of the 2.6 Bcf/d Sur-de-Texas pipeline into south central Mexico
    • AEGIS notes that the eventual completion of this extension will help to increase southbound flows, on the Sur-de-Texas line, into Mexico which could provide a boon to local basis
  • While the Mariner East 2 NGL pipeline recently had a year-long state ban on permits lifted, Energy Transfer, the developer of the pipeline, still has 12 locations where permit reviews are incomplete (PointLogic)
    • At least two sites require major modifications to prevent sinkholes in order to meet the anticipated mid-2020 completion date
    • The Mariner East 2 would expand NGL capacity to 345 MBbls/d
    • The pipeline runs across the southern portion of Pennsylvania into Philadelphia
  • The CFTC reported that managed money long positions increased by 4,759 contracts to 130,094 total contracts
    • Short positions increased by 632 contracts to 373,279 total contracts, a 52-week high

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