June 2, 2020

June 2, 2020
Share
Print Friendly, PDF & Email
  • WTI is up 40c to $35.84/Bbl, and Brent is up 61c to $38.93/Bbl
  • Oil prices moved higher Tuesday morning as traders expect a potential extension of record production curbs by OPEC+
    • A decision to extend oil cuts will hinge on the group’s two largest producers, Russia and Saudi Arabia, with Russia expected to make a decision on its OPEC+ position on Tuesday (Bloomberg)
  • Brent crude’s prompt spread flipped into backwardation for the first time since early March, a sign of tightening in near-term supply/demand balances
    • The move to backwardation was ephemeral this morning as the August contract is currently trading a few pennies under September Brent, as of 7:20 AM
    • Today’s flatter curve shape is much different from the steep contango that was in the curve back in April. At its most bearish point, Brent M1-M2 was at $3.97 of contango
  • Natural gas is up 1.9c to $1.793/MMBtu
  • Henry Hub cash prices dropped $0.18/MMBtu yesterday, settling at $1.52
    • The Oct20-Jan21 spread continues to widen, currently at $0.93, inferring a growing steepness in the natural gas curve’s contango heading into 2021
    • Bal ’20 Waha basis has rallied approximately $0.15/MMBtu over the last several days, coming in at -$0.40/MMBtu, while Cal 21 Waha basis has seen a similar $0.10/MMBtu price improvement
  • LNG feedgas demand remains below 4.0 Bcf this morning, representing a more than 5-Bcf drop from March peaks of 9.6 Bcf
    • Given the current forward curves for TTF, JKM, and Henry Hub, LNG exports are unlikely to be economic until October or November
    • A lack of new LNG projects coming online this year further puts pressure on feedgas demand
  • ExxonMobil is seeking to increase the capacity of its 2.0 Bcf/d Golden Pass LNG facility to nearly 2.4 Bcf/d (Reuters)
    • The first of three LNG trains is expected to be available 2024 with the entire export facility completed by 2026

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