June 12, 2019

June 12, 2019
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  • WTI is down $1.46 to $51.81/Bbl, and Brent is down $1.44 to $60.85/Bbl
  • Oil prices lower this morning on fears of another US stock build and demand worries
    • The American Petroleum Institute (API) showed an increase of 4.9 MMBbl last week – EIA data due out later this morning
    • Goldman painted a bearish picture yesterday, saying an uncertain macroeconomic outlook and volatile production from Iran could lead to OPEC capitulation on supply cuts (Reuters)
  • The first hints of supply cuts from OPEC lasting past 2019 were eluded to by the U.A.E. Energy Minister Suhail Al Mazrouei (Bloomberg)
    • Al Mazrouei said today that production curbs being made by OPEC+ should be continued “at least until the end of the year”
    • Saudi Arabia has been advocates for continually supporting the market as well. Out of the OPEC+ group, Russia tends to be the other large producer wild card
  • EIA petroleum data is due out this morning at 9:30 am CT
    • U.S. Crude Inventories:                  –        713 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:             +       514 MBbls
    • U.S. Distillate Inventories:             +     1106 MBbls
    • U.S. Refinery Utilization:               +   0.53% change
  • Natural gas is down 1.1c to $2.388/MMBtu
  • Weather models are mostly showing climate normals for the 11-15 day window
    • Longer dated weather models, July and August, have been getting warmer on average – while very far out, this is very positive
  • California is issuing a flex alert for the state due to unseasonably high temperatures and energy demand
    • Two power generation units, totaling 1260 MW, are currently offline due to mechanical issues
    • Spot gas at the SoCal Border has jumped from $1.46/MMBtu to $2.73/MMBtu
  • TC Energy has officially completed the construction of the 2.6 Bcf/d Sur de Texas-Tuxpan pipeline
    • This pipeline runs from the Agua Dulce hub through the Gulf Coast into central eastern Mexico
    • Given the on-time completion of Kinder Morgan’s 2 Bcf/d Gulf Coast Express pipeline in the fall, Permian gas should have easier access to a very demanding Mexican market

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