- WTI is down 18c to $56.04/Bbl, and Brent is down 24c to $63.02/Bbl
- The US imposed sanctions on Chinese state-owned trading firm Zhuhai Zhenrong for allegedly continuing to accept Iranian crude (Argus)
- On Monday US secretary of state Mike Pompeo said Zhuhai Zhenrong violated US law by accepting crude from Iran
- China firmly opposed the action by the US, urging the US to “immediately correct its wrongdoing”
- Brent’s put skew eased on Monday, reaching its least bearish level since October ’18 (Bloomberg)
- Brent 2nd-month is near a rare call skew bias
- Overall option volatility remains elevated. Both Brent and WTI 2nd-month implied vol are about 31.5
- This is the highest level in nearly a month
- API inventory data is due at 3:30pm CST
- The Bloomberg survey expects a drop of 4.156 MMBbl/d in EIA figures due Wednesday
- Natural gas is down 0.7c to $2.305/MMBtu
- Both Elba Train 1 and Freeport Train 1 are producing and receiving feed gas, respectively
- Elba is currently seeking permission to start flowing feed gas to its second train
- Cameron Train 1 has officially completed the commissioning phase and is fully ready for future commercial operations
- Trains 2 and 3 are expected to come online in 4Q2019 and 1Q2020 respectively
- First cargo was shipped back at the end of May
- Interestingly enough, LNG feed gas is hovering just off one-year lows at 5.2 Bcf/d
- The hope was for July to provide the necessary weather to jumpstart natural gas spot prices, which are on track to be their lowest in 20 years
- August is trending the same way with mild forecasts
- LNG and power burn will continue to provide footing underneath prices, but weather is not cooperating
- August is trending the same way with mild forecasts
- Kinder Morgan’s Permian Highway is still facing unusual local regulatory backlash from Katy, Texas
- While this is unlikely to have much of an impact on the start date of the pipeline, it could influence future decisions regarding the potential Permian Pass pipeline
