July 10, 2020

July 10, 2020
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  • WTI is down 53c to $39.09/Bbl, and Brent is down 44c to $41.91/Bbl
  • Oil futures are down as the International Energy Agency (IEA) said the spike in Covid-19 cases could derail the market recovery
    • California and Texas have recorded a recorded a record surge in virus cases recently
    • The potential restart on crude exports in Libya is also weighing on price
  • The IEA boosted its outlook for global oil demand in its latest monthly report, but warned that the recovery could be derailed by the resurgence of the coronavirus (Bloomberg)
    • The agency estimated fuel consumption during the second quarter was slightly less severe than previously estimated, and demand should rebound sharply over the next three months, according to the report
    • However, the flare-up of the virus is “casting a shadow over the outlook”, the IEA cautioned
  • Libya’s National Oil Corp. (NOC) lifted force majeure that will allow crude exports from all of the country’s ports (Bloomberg)
    • The NOC says technical issues will keep output at low levels
    • The Kriti Bastion tanker has started loading 730 MBbl of crude at Es Sider, according to port operator Waha Oil Co.
    • Es Sider was one of the terminals shut down since January due to military strife’s. The conflict has slashed production to just 90 MBbl/d from 1.2 MMBbl/d before the blockade in January
  • Natural gas is down 0.2c to $1.777/MMBtu
  • Gas-fired power generation is expected to reach record-highs by mid-July (Platts)
    • Historically low gas prices, coupled with blistering heat forecast for July have helped buoy gas demand for power generation
    • Data from Platts shows demand from US generators topping its previous record high at 45.4 Bcf/d, and potentially rising to over 47 Bcf/d over the next two weeks
    • AEGIS notes this increase demand in gas for power-generation comes at an opportune time, helping to offset some gas demand losses from LNG and the industrial sector
  • On Thursday, the EIA announced an injection of 56-Bcf for the week ending July 3, 2020
    • This injection was below both the 65-Bcf build reported a week earlier and the 83-Bcf build during the corresponding week in 2019
    • Storage now stands 28%, or 685-Bcf above last year’s level of 2.448 Tcf

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