June 25, 2020

June 25, 2020
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  • WTI is down $2.71 to $37.12/Bbl, and Brent is down $2.57 to $39.62/Bbl
  • Oil slips again as growing coronavirus cases are casting doubt on demand
    • The Texas governor warned of “massive outbreak” in the state. Florida and California also reached new daily records of infections
    • Gasoline futures fell the most in two months on Wednesday as markets plunged. Prices dropped 8% after hotspot states announced record viral case increases
  • U.S. crude inventories rose last week by 1.4 MMBbl to a new record high of 540.7 MMBbl, according to the Energy Information Administration (EIA)
    • The rise in inventories was inline with the average analyst estimate
    • Crude stocks in the U.S. Strategic Petroleum Reserve (SPR) increased to 653.7 MMBbl in the week ended June 19, up by 2 MMBbl compared to the previous week
    • Stocks at Cushing, Oklahoma, eased by 990 MBbl to 45.8 MMBbl in a seventh week of withdrawals
  • Natural gas is down 4.2c to $1.555/MMBtu
  • Analysts expect a 107-Bcf injection for the week ending June 19 (Platts)
    • This would be above both the 103-Bcf injection reported in the corresponding week last year, and the five-year average of 73-Bcf
    • Injection estimates ranged from a low of 88-Bcf to a high of 120-Bcf
    • A withdrawal within expectations would increase the surplus to the five-year average to 453 Bcf with total stocks at 2.999 Tcf
  • Novatek’s CFO claims more than 45 U.S. LNG cargoes were cancelled in the month of June, that equates to approximately 4 Bcf/d in demand (Reuters)
    • Analysts expect a similar amount of cargoes to be cancelled for the month of July and August
    • AEGIS recommends topping off any remaining Bal ’20 volumes with swaps given an increasingly uncertain market outlook for natural gas

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