July 19, 2019

July 19, 2019
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  • WTI is up 43c to $55.73/Bbl, and Brent is up 66c to $62.59/Bbl
  • Oil higher this morning after a US warship destroyed an Iranian drone in the Strait of Hormuz
    • President Trump announced on Thursday that the USS Boxer took defensive action after the drone closed to within 1,000 yards of the warship
    • Iran denies it lost a drone in the strait and says the US must have downed one of its own drones
    • Tensions between the US and Iran have wavered back and forth over the last month or so, but have generally escalated, buoying oil prices
  • IEA director Fatih Birol said on Friday that his agency doesn’t expect oil prices to rise significantly because of lackluster demand and a glut in global crude markets (Reuters)
    • In an interview with Reuters on Thursday, Birol said the IEA is revising its 2019 global oil demand growth forecast down to 1.1 MMBbl/d and may cut further if economies like China show further weakness
    • AEGIS notes – for added color on PMI and economic indicators please see our July 12 Market Summary
  • Natural gas is down 0.3c to $2.284/MMBtu
  • Venture Global LNG received $10 billion in construction financing commitments to move forward with the construction of the Calcasieu Pass and TransCameron pipeline in southern Louisiana
    • The project has an anticipated start date sometime in 2022
    • The Calcasieu facility should be able to export roughly 1.7 Bcf/d
    • The TransCameron Pipeline will have a capacity of 2 Bcf/d
  • Gulf of Mexico production is recovering near to pre-storm levels as it reaches 1.74 Bcf/d
    • Only 519 MMcf/d, or 19% of Gulf gas production, remains shut in
    • Concerns were largely overblown regarding Barry’s impact on the energy supply chain around the Gulf as demand was largely untouched
      • Even the shut-ins for production were relatively unnoticed due to strong production numbers from the rest of the country
  • Yesterday, natural gas storage grew by 62 Bcf compared to the 65 Bcf estimates analysts were expecting
    • This was one of the first bullish reports during the injection season and comes on the heels of a massive heat wave gripping the Midwest and northeastern regions
    • Total inventories have reached 2.533 Tcf and are now at a surplus of 291 Bcf compared to last year, while being at a deficit of 143 BCf to the five-year average

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