March 10, 2020

March 10, 2020
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  • WTI is up 266c to $33.79/Bbl, and Brent is up 310c to $37.46/Bbl
  • Saudi Aramco’s CEO has stated that the company plans to produce 12.3 MMBbls/d come April
    • This would be 300 MBbls/d over the company’s maximum sustained capacity and well over their current production of 9.7 MMBbls/d
    • Russia’s Oil Minister also stated that Russia could raise their output by 500 MBbls/d in the near future
    • Russia produced approximately 11.3 MMBbls/d of oil and condensate, in February, according to preliminary data from the Energy Ministry
  • President Trump announced he will be taking “major” steps to strengthen the economy against the spread of Covid-19 following yesterday’s steep market declines (Reuters)
    • One of these measures may include tax cuts if it can receive Congressional approval
    • Markets also appear to have already priced in an additional interest rate cut from the FED
  • The EIA is delaying their Short-Term Energy Outlook until Wednesday morning in order to incorporate recent market movements
  • Natural gas is up 6.6c to $1.844/MMBtu
  • Natural Gas prices, specifically Waha basis, saw noticeable gains yesterday amidst a steep oil market selloff
    • The rally may be based on the belief that oil prices in the $30/Bbl range will curb oil production, namely in the Permian, and lead to less associated gas growth
    • Permian producers Diamondback and Parlsey both announced yesterday that they will drop rigs given the current price environment
  • Global LNG Prices are nearing all-time lows in the spot market for the month of February, particularly for large importers like China and Japan
    • Cheap LNG prices may have minimal impact on China’s LNG demand, for now, as the country continues to deal with the coronavirus, travel restrictions, and high gas inventories
    • There are signs of returning domestic gas demand from the industrial sector, however
    • While China appears to have made some headway on handling the coronavirus, countries like Italy recently extended a statewide travel ban through the end of the month

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