- WTI is down 57c to $38.37/Bbl, and Brent is down 53c to $40.65/Bbl
- Oil futures retreated close to 2% after an industry report showed a surprise surge in crude inventories
- WTI briefly fell below $38/Bbl Wednesday morning following the American Petroleum Institute’s bearish crude oil report
- The Tuesday afternoon report showed that U.S. oil stockpiles expanded by 8.42 MMBbl last week
- If confirmed by government figures later on Wednesday, it would be the largest build since the end of April
- Nigeria will implement all of the oil-production cuts it agreed to with OPEC+ by mid-July at the latest, according to its state energy company
- The OPEC+ one month supply cut extension hinged on promises from Nigeria and other such as Iraq to make up for their non-compliance of output quotas last month
- “Definitely by the end of June, we’ll see full compliance from Nigeria,” Mele Kyari, of the Nigerian National Petroleum Corp said in a Bloomberg television interview
- EIA weekly data is due at 9:30 AM CST
- U.S. Crude Inventories: – 1,012 MBbls (Avg. Bloomberg surveys)
- U.S. Gasoline Inventories: – 318 MBbls
- U.S. Distillate Inventories: + 3,408 MBbls
- U.S. Refinery Utilization: + 0.43% change
- Natural gas is up 0.2c to $1.769/MMBtu
- Global gas demand is expected to see record-decline this year, IEA says
- Global gas demand is expected to fall by 4%, or 5,296 Bcf, to 135,946 Bcf this year
- This decline in consumption comes as lower heating demand from the winter, lockdown measures caused by COVID-19, and the lower level of economic activity caused by the virus continue to weigh on global demand
- EIA lowered its outlook for gas production and prices in 2020; rebound expected in 2021
- The agency lowered its gas production forecast for the year by 600 MMcf/d, down to 97.78 Bcf/d in its June Short-Term Energy Outlook (STEO)
- “EIA continues to forecast a decline in US dry as production from 2019 record levels, as low natural gas demand continues to put downward pressure on prices,” EIA Administrator Linda Capuano said in a statement accompanying the STEO report
- Price forecasts for Henry Hub in 2Q 2020 were also lowered 12 cents, down to $1.73/MMBtu, and 21 cents for 3Q 2020, to $1.90/MMBtu. The full year average price outlook is projected at $2.04/MMBtu for the year 2020, down from earlier estimates of $2.14/MMBtu in May.
- A price rebound is expected in 2021 by the EIA, with price forecasts rising to $3.08/MMBtu in January on the backs of higher demand in the winter on top of reduced production
