January 8, 2020

January 8, 2020
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  • WTI is down $1.13 to $61.57/Bbl, and Brent is down 89c to $67.38/Bbl
  • Oil prices are down this morning after being up nearly $4/Bbl to $65.85/Bbl for WTI – following Iranian rocket attacks on American forces in Iraq last night
    • Rhetoric from both President Trump and Iran’s foreign minister appeared to deescalate further conflict
    • It also became clear that Iran’s targeted response did not affect oil infrastructure, leading prices to retreat from their initial surge
    • No one from the U.S. was killed in the attack that we know of so far
  • Front month trading volume for WTI surged to record the busiest opening hour of trading (7 a.m. in Singapore) in almost four months, following the missile attacks (Bloomberg)
    • More than 55k trades were booked for prompt WTI, the heaviest volume since Sept. 16, when a drone strike struck Saudi oil infrastructure
    • Typical volume for WTI’s opening hour is usually under 5k contracts
  • EIA weekly data is due at 9:30 AM CST
    • U.S. Crude Inventories:                  –     3,185 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:             +     2,700 MBbls
    • U.S. Distillate Inventories:             +     3,956 MBbls
    • U.S. Refinery Utilization:               +     0.06% change
  • Natural gas is up 0.9c to $2.171/MMBtu
  • Prompt-month gas prices have seen some slight improvements as the 11-to-15-day forecast added 7 Heating Degree Days overnight
    • Colder-than-normal temperatures are moving into the Midwest; however, the east coast currently remains normal to slightly-colder-than-normal
    • Technical peak winter is January 15, as we move past that date, we get closer to the spring shoulder season, lowering the chances of bringing sustained arctic weather to spur a demand driven rally
  • The 1.5 Bcf/d Atlantic Coast Pipeline (ACP) has faced another setback as a key air permit for a compressor station in southern Virginia was vacated
    • The same court that vacated the air permit, also vacated key permits that would allow the ACP to cross the Appalachian Trail
    • The Supreme Court is scheduled to rule on the revoked Appalachian Trail permits in June, which will be key in determining the long-delayed pipeline’s fate
  • Flows on the 2.6 Bcf/d Sur-de-Texas pipeline increased 0.3 Bcf/d to total 1.1 Bcf (PointLogic)
    • Exports to Mexico are measured at 5.6 Bcf, a significant improvement from Christmas when exports sat slightly above 3.0 Bcf

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