June 13, 2019

June 13, 2019
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  • WTI is up $2.04 to $53.18/Bbl, and Brent is up $2.39 to $62.36/Bbl
  • Crude oil surges after a suspected attack on two tankers in the Strait of Hormuz and in the Gulf of Oman near Iran
    • A tanker carrying naphtha and another carrying methanol were part of the attack with one of the tankers saying they “suspected of being hit by a torpedo”
    • A fifth if the global oil consumption passes through the area
  • Oil prices on Wednesday plunged as US crude oil stocks rose 2.2 MMBbl to 485.5 MMBbl and demand worries continue to loom
    • Stocks at Cushing rose 2.1 MMBbl to 52.9 MMBbl, in the week ended June 7
    • US refiners increased utilization with throughput now at 17.1 MMBbl/d, the highest level since January
      • Refiners are still operating at slightly lower levels than last year
  • Natural gas is down 2.5c to $2.361/MMBtu
  • Analysts surveyed by Platts are anticipating the EIA to report a 108 Bcf injection into natural gas storage for the week ended June 7th
    • The Platts’ survey ranged from 100 Bcf to 121 Bcf
    • An injection of 108 Bcf would increase stocks to 2.094Tcf
    • The deficit versus the five-year average would shrink to 224 Bcf and the surplus versus last year would expand to 195 Bcf
  • Originally anticipated for a 4Q2019 and 1Q2020 start date, Freeport LNG’s Trains 2 and 3 are now projected to begin operations in 2H2020 due to construction delays
    • Each of these trains have liquefaction capacity of 600 MMcf/d
  • Heating and Cooling degree days have had the largest effect of driving natural gas prices since 1950, as a result, the mild weather has caused gas prices to drop dramatically (Platts)
    • However, this has led to a significant uptick in switching from coal to gas power generation
    • Gas fired power generation is 25% less expensive than coal
    • MISO is expected to add about 350 MMcf/d of more-than-expected gas-fired generation over the peak months of July and August, according to Platts Analytics

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