- WTI is down $2.51c to $37.09/Bbl, and Brent is down $2.22c to $39.51/Bbl
- Crude oil prices slumped this morning by over 5% as the Federal Reserve paints a dreary picture for the economy
- Fed Chairman Jerome Powell said the pandemic could inflict long-lasting damage on the economy and signaled it would keep rates near zero possibly for years to come (Bloomberg)
- An uptick new coronavirus cases in the U.S. is also causing worry for investors. Texas on Wednesday reported 2,504 new cases, the highest one-day total since the pandemic began
- Dow Jones futures are signaling a -750 point open this morning
- Crude Spreads:
- The August WTI-Brent spread narrowed by 7c to -$1.95 on ICE on Wednesday; the tightest close since the spread began trading
- Magellan East Houston (MEH) spread to WTI at Cushing narrowed to -45c to 65c/Bbl yesterday, the weakest since May 19
- Oil stocks on the Gulf Coast (PADD 3) have been increasing while inventories at Cushing, Oklahoma, where Nymex is priced, have been falling fast
- The EIA reported a 5.7 MMBbl build in crude oil inventories yesterday for the week ending June 5
- The build came mostly from a jump in oil imports that rose 685 MBbl/d to 6.864 MMBbl/d
- Stocks at Cushing, Oklahoma, once again declined, falling 2.3 MMBbl to 49.4 MMBbl
- Government stocks also increased with the Strategic Petroleum Reserve climbing 2.2 MMBbl on the week
- Natural gas is up 0.5c to $1.785/MMBtu
- Analysts expect a 95-Bcf injection for the week ending June 5 (Platts)
- This would be below the 107-Bcf injection reported in the corresponding week last year, but near the five-year average of 94 Bcf
- Analyst injection estimates ranged from a low of 84 Bcf to a high of 106 Bcf
- A withdrawal within expectations would increase the surplus to the five-year average to 421 Bcf with total stocks at 2.809 Tcf
- The Oct20-Jan21 spread continues to widen, now at $0.98/MMBtu, signaling that markets are perhaps growing more concerned with the S&D balance in Bal ‘20
- Waha basis has weakened since the start of last week with Bal ’20 falling $0.11/MMBtu and Cal ’21 falling $0.08/MMBtu
- The Glenfarne Group announced it will make a final investment decision (FID) on both the Magnolia LNG and Texas LNG facility by the end of 2021
- The Magnolia LNG facility has capacity of 1.2 Bcf/d, while the Texas LNG facility has capacity of 0.6 Bcf/d
- These two projects join a growing list of export facilities that have had their FID pushed back to 2021 due to the collapse in global gas prices
