July 2, 2020

July 2, 2020
Share
Print Friendly, PDF & Email
  • WTI is up 42c to $40.24/Bbl, and Brent is up 50c to $42.53/Bbl
  • The August WTI contract held above $40/Bbl Thursday morning as a bigger-than-expected drop in U.S. crude stockpiles outweighed virus fears
    • Sentiment was also aided by a survey showing OPEC output fell to the least since 1991 in June, while Russia reached near total compliance with its quota (Bloomberg)
    • OPEC+ alliance is set to taper its 9.7 MMBbl/d of cutbacks to 7.7 MMBbl/d from August to December, and slow the reductions to 5.7 MMBbl/d until April 2022, according to Bloomberg
  • U.S. crude inventories fell by 7.2 MMBbl to 533.5 MMBbl last week, according to the Energy Information Agency (EIA)
    • The average analyst estimate was much lower at only a 289 MBbl build
    • Crude stocks in the U.S. Strategic Petroleum Reserve (SPR) moved higher by 1.7 MMBbl. The SPR stocks are not included in the overall EIA commercial crude inventory figures
    • Stocks at Cushing, Oklahoma, eased by 260 MBbl to 45.6 MMBbl in an eighth week of withdrawals
  • U.S. Weekly Jobless Claims fell to 1.427 million versus estimates of 1.35 million
    • June jobless rate down to 11.1% versus estimate of 12.5%
  • Natural gas is up 2.1c to $1.692/MMBtu
  • U.S. LNG feedgas demand fell to a twenty-month low yesterday as flows went from 4.4 Bcf to 3.2, according to data from Platts
    • European LNG imports also hit a 16-month low, in June, due to COVID induced demand destruction
    • LNG arbs will likely remain uneconomical until September or October, at the earliest, keeping domestic feedgas demand low while Europe works through its own seasonally-high storage situation
  • Analysts expect a 77-Bcf injection for the week ending June 26 (Platts)
    • This injection would be below the 92-Bcf injection reported in the corresponding week last year, but above the five-year average of 65-Bcf
    • Injection estimates ranged from a low of 66-Bcf to a high of 85-Bcf
    • A withdrawal within expectations would increase the surplus to the five-year average to 478-Bcf with total stocks at 3.089 Tcf

Access Our Deeper Market Insights

Product Factor Matrix

Proprietary view of priced-in factors driving the market vs. potential bullish and bearish surprises.

Learn More

Trading Recommendations

Clear trading recommendations based on real market opportunities that enable clients to take action.

Learn More

Market Data

A comprehensive suite of the latest curves, spot pricing, settles, and strips to drive confident hedging decisions.

Learn More

Benchmarking and Trade Analytics

Real-time access to analyze your hedging strategy against AEGIS benchmarks and current market activity.

Learn More