July 1, 2020

July 1, 2020
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  • WTI is up 10c to $39.37/Bbl, and Brent is up 6c to $41.33/Bbl
  • Oil futures in New York briefly rose above $40/Bbl on Wednesday morning after an industry report indicated the first drop in U.S. crude stocks since May
    • Data from the American Petroleum Institute (API) signaled inventories shrank by 8.16 MMBbl last week
    • That would be the largest draw this year if confirmed by the Energy Information Agency later this morning
  • EIA weekly data is due at 9:30 AM CST
    • U.S. Crude Inventories:                  +          289 MBbls (Avg. Bloomberg surveys)
    • U.S. Gasoline Inventories:             –       1,272 MBbls
    • U.S. Distillate Inventories:             +            36 MBbls
    • U.S. Refinery Utilization:               +       0.35% change
  • Natural gas is down 8.6c to $1.665/MMBtu
  • The European weather model continues to creep hotter with a forecast of 213 population-weighted Cooling Degree Days (CDDs) for the first half of July, compared to 209 CDDs yesterday, firmly planting the start of this July as the hottest on record
    • The Commodity Weather Group’s full month forecast for July is currently at 386 CDDs, but could shoot higher into the 390s if the heat persists
    • For reference, the ten-year normal is 376 CDDs for the month of July and the 30-year normal is 338 CDDs
  • The US-Mexico-Canada (USMCA) trade agreement goes into effect today, July 1
    • This agreement will benefit the US by opening up Mexico’s energy industry to more investment into gas pipeline capacity, oil production, and power generation
    • The rules go into effect on July 1, but they are subject to revision after a 60-day comment period

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