July 5, 2019

July 5, 2019
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  • WTI is down 78c to $56.56/Bbl, and Brent is down 4c to $63.26/Bbl
  • An Iranian ship thought to be heading to Syria was seized with the help of British naval forces off of Gibraltar (CNN)
    • The US asked the UK for help in Thursday’s seizure, because the delivery would have violated UN sanctions against Syria
    • Iran officials demanded the release, calling the capture “illegal” and “piracy,” and threatened to seize a British vessel in retaliation (Reuters)
  • Various US and European economic indicators point to pessimism among corporate managers
    • German industrial orders in May were weaker than expected, and its government warned of continued economic weakness (CNBC)
    • US new orders for factor goods fell for the second consecutive month in May (CNBC)
    • AEGIS notes these continued, negative indicators have been somewhat nullifying bullish supply-side fundamentals for crude oil
  • EIA reported a draw of -1085 MBbls in U.S. crude-oil inventories for the week ending 6/28/2019.
    • This was smaller than the average estimate of -2789 MBbls as reported by Bloomberg.
    • US stocks had been decreasing at a faster rate, but levels are still higher than last year by 52 MMBbls
    • Cushing storage, perhaps more important to Nymex WTI’s relative pricing, have changed little in a month
  • Natural gas is up 4.4c to $2.334/MMBtu
  • EIA reported a build of 89 Bcf for the week ending 6/28/2019. This was larger than the median estimate of 79 Bcf, and prices sank a few cents on the news
    • Today’s stat fell within the expected range, which was 90 Bcf on the more bearish end, and 68 Bcf on the more bullish end
    • Inventories for the US are now at a surplus of 249 Bcf to last year and a deficit of 152 Bcf to the five-year average
  • Weather forecasts are trending hotter for the middle of July  in the Central and Eastern US
    • While Texas is also expected to be hotter, a ridge could keep temperatures from being much above normal
  • Sur de Texas – Tuxpan, a large pipeline that would enable more South Texas gas exports to Mexico, will remain offline while a dispute is arbitrated
    • The line has had multiple delays, and would have added demand to Texas Gulf Coast markets, but not providing Waha basis with much support
    • Platts estimated US exports to Mexico could be capped at near 5 Bcf/d until the disputes with this pipeline and another are settled (Gas Daily)

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