July 20, 2020

July 20, 2020
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  • WTI is down 34c to $40.25/Bbl, and Brent is down 36c to $42.78/Bbl
  • Oil princes edged lower as an increase of virus cases in hot spots across the globe continue to cloud demand recovery
    • Infections in Hong Kong hit a new record on Sunday, and Los Angeles is close to another stay-at-home order (Bloomberg)
    • WTI and Brent continue to trade in a tight range around $40/Bbl after rallying from the low $20’s only a few months ago
  • Chevron agreed to buy Noble Energy for $5 billion in an all-stock purchase
    • The purchase increases Chevron’s presence in the Permian
    • The deal would be the largest oil-patch tie-up since the coronavirus spread across the globe, the Wall Street Journal reported on Monday
    • Noble considered several alternatives before the Chevron deal, according Noble CEO (Bloomberg)
  • Rigs seeking oil fell by one to 180 last week according to Baker Hughes
    • Both the Permian and Barnett loss one a piece while the Eagle Ford gained two
    • Active Permian rigs stand at 124, down from 440 a year ago
  • Natural gas is down 2.5c to $1.693/MMBtu
  • The first nineteen days of July verified as the second hottest on record,in terms of pop-weighted Cooling Degree Days (CDDs)
    • July’s forecast of 417 CDD’s would make this the warmest July on record, however risk remains for cooler weather through the remainder of the month
    • The prompt-month Henry Hub contract is $0.25/MMBtu below its high of $1.92 reached earlier this month (CWG)
  • The CFTC reported that managed money net long positioning increased by 9,756 contracts to total 269,959 contracts
    • Managed money short positioning fell by 5,709 contracts to total 232,652 contracts
    • Managed money net positioning now stands at +37,397 contracts, this is the second week in a row positioning has been positive

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