June 11, 2020

June 11, 2020
Share
Print Friendly, PDF & Email
  • 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

Access Our Deeper Market Insights

Product Factor Matrix

Proprietary view of priced-in factors driving the market vs. potential bullish and bearish surprises.

Learn More

Trading Recommendations

Clear trading recommendations based on real market opportunities that enable clients to take action.

Learn More

Market Data

A comprehensive suite of the latest curves, spot pricing, settles, and strips to drive confident hedging decisions.

Learn More

Benchmarking and Trade Analytics

Real-time access to analyze your hedging strategy against AEGIS benchmarks and current market activity.

Learn More