June 27, 2019

June 27, 2019July 1st, 2019
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  • WTI is down 34c to $59.04/Bbl, and Brent is down 40c to $66.09/Bbl
  • Oil prices are taking a breather this morning after rising 14% in just seven trading sessions
    • Part of the price pause is due to President Trump announcing that he might impose substantial tariffs on Chinese imports
    • Trump told the Fox Business Network in an interview that there would be more levies on Chinese goods if there’s no progress at his meeting with President Xi at the G-20 this weekend (Bloomberg)
  • Philadelphia Energy Solutions (PES), which is the largest oil refinery on the East Coast, will be closing the South Philadelphia facility in the coming weeks (Philadelphia Inquirer)
    • An explosion at the facility earlier this week caused massive damage, forcing the company to lay nearly 1,000 people directly and close the facility
    • The 335 MBbl/d facility’s closure have caused a spike is gasoline prices, especially for the Northeast, and will hurt crude oil demand
    • The refinery accounts for a large component of PADD 1 refinery demand. This time last year PADD 1 was processing about 1.2 MMBbl/d of crude oil
      • Assuming the Philadelphia refinery would of ran at 90% this summer, PADD 1 will lose about 2 MMBbl a week of crude demand
  • US crude inventories fell by a massive 12.8 MMBbl to 469.6 MMBbl last week
    • It marked the largest weekly decline since September 2016
    • The large withdrawal in oil stocks likely has some weekly noise built into it. Looking at other large draws in the past, the previous and following weeks typically revert back to a more normal range
    • Exports hits a record high of 3.8 MMBbl/d last week
  • Natural gas is up 1.7c to $2.285/MMBtu
  • The average analyst estimates there will be a 100 Bcf build in natural gas storage
    • This would mark the eighth triple digit build in a row
    • Responses ranged from a low of 92 to a high of 108 Bcf
  • Storage levels for gas are set to break above the five-year maximum range levels in the Midwest (Platts)
    • The average injection of 3.3 Bcf/d has been 126% higher than the five-year average
    • However, ANR’s Michigan field still has ample room to continue absorbing unusually high volumes of natural gas prior to the end of injection season
  • Typical summer heat is predicted to finally emerge in the second half of July
    • The emergence of warmer weather would help continue, what is already, a record gas-fired power burn for this summer

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