July 18, 2019

July 18, 2019
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  • WTI is up 31c to $57.09/Bbl, and Brent is up 49c to $64.15/Bbl
  • State-run Press TV in Iran confirmed that Iran’s Revolutionary Guard captured a foreign vessel on July 14 alleged to be smuggling 1 million liters of fuel in the Persian Gulf
    • Both Brent and WTI are trading higher this morning on the news (Bloomberg)
    • Iran’s foreign minister said Iran is capable of shutting the Straight of Hormuz, but doesn’t want to do it
    • Iran says it plays a big role in securing the strait
  • US crude inventories fell by 3.1 MMBbl to 455.9 MMBbl last week
    • The drop in crude stocks marked a fifth straight week of withdrawals
    • Oil markets were volatile following the EIA data release on Wednesday after traders digested the large product builds versus the drop in production and crude draw
    • Last weeks data included effects from Hurricane Barry in the Gulf
  • Energy Transfer launched a supplemental open season for an expansion of its 570 MBbl/d Dakota Access pipeline
    • The company’s plan is to boost capacity on the line to as much as 1.1 MMBbl/d
    • Bakken oil production is currently at about 1.39 MMBbl/d, near the record set in January of 1.4 MMBlb/d, according to North Dakota state data
  • Natural gas is up 2.7c to $2.331/MMBtu
  • Analysts expect a reported storage build of 65 Bcf
    • Range of estimates are from 56 Bcf to 72 Bcf
    • Should the build fall within expectations, it would be the lowest in the past three months, but still above the 46 Bcf build during this week last year
  • Kinder Morgan is planning a third, 2 Bcf/d, Permian gas pipeline called the Permian Pass
    • The proposed pipeline would run from the Permian to East Texas in order to service LNG demand
    • The project is not in the backlog, however Kinder Morgan is speaking with potential customers
    • Kinder Morgan is already building out two, 2 Bcf/d Permian pipelines
      • Gulf Coast Express – Late September 2019
      • Permian Highway – October 2020
  • Kinder Morgan has finally provided an update on its Elba Island Liquefaction facility, which is now in the advanced stages of the commissioning and start up process – this includes LNG production
    • No time schedule has been provided as to when commercial service will start
    • Kinder Morgan also had its second LNG facility, Southern Gulf LNG, approved by FERC
      • Project will be built in two phases
        • Phase One – Late 2020 planned service date
        • Phase Two – Late 2021 planned service date
      • Should provide approximately 1.4 Bcf/d in capacity

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