July 11, 2019

July 11, 2019
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  • WTI is up 16c to $60.59/Bbl, and Brent is up 4c to $67.05/Bbl
  • Iranian vessels were blocked from approaching a BP Plc oil tanker by the British Navy on Wednesday (Bloomberg)
    • The British Heritage, operated by BP, which can carry as much as 1 MMBbl, was attempting to pass through the Strait of Hormuz
    • “Three Iranian vessels attempted to impede it,” according to a UK government statement
    • The Royal Navy frigate HMS Montrose trained its guns on the Iranian ships trying to divert the tanker
    • AEGIS notes Iran had previously vowed to retaliate after British Royal Marines arrested the super tanker Grace 1 last week carrying Iranian oil headed for Syria
  • US oil producers cut about one-third of Gulf of Mexico crude output as one of the first major storms of the Atlantic hurricane season approaches
    • The drop of about 600 Bbl/d helped push WTI over 4% higher yesterday
  • US crude stocks fell by a whopping 9.5 MMBbl last week versus estimates of just under a 2 MMBbl draw
    • The drop in crude stocks marked a fourth straight week of withdrawals
  • Natural gas is up 2.7c to $2.471/MMBtu
  • Analyst estimates expect storage levels to build by 77 Bcf, which would be the lowest build in three months
    • Estimates range from 67 to 88 Bcf
    • An injection around analyst expectations would bring total storage to around 2.47 Tcf
  • As of June 10, 15 platforms and 4 rigs have been evacuated in the Gulf due to hurricane pressures
    • The result is 0.5 Bcf/d of gas and 603,000 b/d of oil being shut in
      • This accounts for 18% of gas and 32% of oil production in the Gulf of Mexico respectively
    • Cyclone disruption in the Gulf would be more of a demand shock than a supply shock for gas
  • Qatar Petroleum and Chevron Philips Chemical ink a deal to build the world’s largest ethylene cracker, 2 million mt/year
    • Startup of the facility is expected in 2024 with construction to begin in 2021
    • Chevron will own the majority stake at 51%

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