- 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
