July 9, 2020

July 9, 2020
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  • WTI is down 8c to $40.82/Bbl, and Brent is up 10c to $43.39/Bbl.
  • Energy Transfer urged a federal court on Wednesday to stay and order to shut the 570 MBbl/d Dakota Access crude pipeline (DAPL) while an appeal is pending
    • The company is asking the court to hold a status conference tomorrow and decide on the motion July 14
    • Energy Transfer also said it would take about three months and cost about $24 million to safely purge the pipeline of oil and preserve it for future use (ARGUS)
    • DAPL moves Bakken crude to Patoka, Illinois, where it connects to another Energy Transfer pipeline to Nederland, Texas and was ordered shut by a district Judge on Monday
  • A large build in crude inventories last week surprised most analysts who were expecting a draw
    • The EIA reported U.S. crude oil stocks rose by 5.7 MMBbl to 539.2 MMBbl last week amid a sharp rise in imports
    • Crude stocks in the U.S. Strategic Petroleum Reserve (SPR) moved higher by about 600 MBbl during the same week to 656 MMBbl
    • Stocks at Cushing, Oklahoma, rose by 2.2 MMBbl to 47.8 MMBbl, the first weekly build in about two months
  • Natural gas is up 5.6c to $1.880/MMBtu.
  • Analysts expect a 55-Bcf injection for the week ending July 3 (Platts)
    • This injection would be below both the 83-Bcf injection reported in the corresponding week last year and the five-year average of 68-Bcf
    • Injection estimates ranged from a low of 42-Bcf to a high of 65-Bcf
    • A withdrawal within expectations would decrease the surplus to the five-year average to 453-Bcf with total stocks at 3.132 Tcf
  • The July 2020 Cooling Degree Day (CDD) forecast is now at 414, just 1 CDD below the hottest of July all time (Commodity Weather Group)
    • This forecast stands far above the 10-year normal of 376 CDDs and the 30-year normal of 338 CDDs
    • The Balance of Summer strip is up approximately $0.05/MMBtu this morning, erasing yesterday’s losses

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