July 27, 2020

July 27, 2020
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  • WTI is up 27c to $41.56/Bbl, and Brent is up 25c to $43.59/Bbl
  • Oil prices are higher Monday morning, but Brent’s prompt spread is trading at its largest contango structure since May, a sign of oversupply
    • Brent and WTI have been stuck near $40/Bbl since early June and Brent’s steepening contango is a sign that the market’s re-balancing appears to have taken a pause
    • OPEC+ has planned to start supplying the market with more supply starting August 1 by relaxing curbs, likely putting further strain on the global S&D
  • Money Managers have increased their bullish WTI crude oil bets by 5,564 net-long positions to 362,500 (CFTC)
    • The net-long position was the most bullish in three weeks
    • Long positions stand at 421,028 in the week ending July 21
    • Short-only positions fell 1,148 lots to 58,528
  • Oil rigs rose for the first time since March last week, according to Baker Hughes
    • Rigs seeking oil rose by one to 181
    • Total Permian rigs stand at 126, down from 443 this time last year
  • Natural gas is down 2.1c to $1.787/MMBtu
  • July 2020 is looking to end as the third hottest month on record with a final Cooling Degree Day (CDD) number of 409 (Commodity Weather Group)
    • August forecasts have total CDDs currently estimated at 350, this is slightly above the 10-year average of 336 CDDs and above the 30-year average of 309 CDDs
    • The balance of summer strip is starting the morning lower, currently down $0.025/MMBtu, with a last print of $1.860
  • FERC approves in-service of Cameron LNG Train 3
    • Phase 1 of the Cameron LNG export project includes three liquefaction trains that will export 12 Mtpa of LNG or approximately 1.7 Bcf/d
  • Associated gas production in the Bakken has increased (Platts)
    • Bakken production fell by 0.7 Bcf/d in March as producers shut-in wells, reaching 1.4 Bcf/d, down from the 2.1 Bcf/d averaged during the first three months of the year
    • Bakken associated gas flows are now up by 300 MMcf/d, reaching 1.7 Bcf/d

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