June 30, 2020

June 30, 2020
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  • WTI is down 66c to $39.04/Bbl, and Brent is down 71c to $41.00/Bbl
  • West Texas Intermediate has been caught between $35 and $40/Bbl for all of June, a great improvement over May, but held back from a further rally due to depressed demand
    • June marked the reopening of many states in the U.S., but with more people out of their homes viral cases have soared
    • A spike in coronavirus cases has pushed some states to reinstate certain measures that will likely further slow the timeline of a demand recovery
  • Demand indicators: (Bloomberg)
    • Refinery utilization
      • U.S. -20% y/y, +3% m/m
      • China Independent refineries +13% y/y, -2% m/m
      • State-run in China East +5% y/y, 6% m/m
    • Air Travel
      • U.S. throughput -77% y/y, +94% m/m
      • Commercial flights worldwide +39% m/m
      • Volume in China -39% y/y, +40% m/m
    • Road Congestion
      • New York -71% y/y, +80 m/m
      • London -56% y/y, +29% m/m
      • China -49% y/y, +13% m/m
      • Berlin -38% y/y, -19% m/m
      • Paris -30% y/y, +49% m/m
      • Sao Paulo -81% y/y, +5% m/m
  • Natural gas is up 5.1c to $1.760/MMBtu
  • The European weather model is currently forecasting 209 population-weighted Cooling Degree Days (CDDs) for the first half of July, according to Commodity Weather Group
    • This forecast would make this year the hottest start to July ever
    • The ten-year normal for this time period is 178 population-weighted CDDs, while the thirty-year normal is 157 population-weighted CDDs
  • Feedgas flows to LNG terminals reached 4.34 Bcf/d on Monday (Bloomberg)
    • Feedgas deliveries are up by 780 MMcf/d over the past week, after reaching a 14 month-low of 3.5 Bcf/d on June 9
    • By September, models show feedgas demand rising to over 7 Bcf/d, even setting new daily export demand records during the fourth quarter (Platts)
  • The Supreme Court issued an order asking the Trump administrations solicitor general to file briefs on the PennEast case (Reuters)
    • The industry has watched the case closely as many fear that the decision could give states effective veto power over vital natural gas projects in the Northeast
    • The proposed 116-mile pipeline would carry as much as 1 Bcf/d of natural gas from northern Pennsylvania to New Jersey

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