- WTI is down $2.33 to $24.62/Bbl, and Brent is down $1.28 to $27.45/Bbl
- Oil fell to the lowest level in 17 years on Wednesday morning as the viral pandemic shuts down much of the global economy, destroying demand
- The number of confirmed coronavirus infections past 200k, more than doubling over the span of two weeks
- Global travel restrictions and home quarantines have raised the prospect of a the economy moving into a recession
- Halliburton will furlough about 3,500 workers at its headquarters in Houston as oil trades in the $20’s
- The affected employees will alternate working one-week on and one-week off during the two-month period
- Benefits will be kept during the furlough, but workers will not be paid for the weeks not worked
- Many of the company’s customers have slashed capex this month between 25-50% in the face of low oil prices
- EIA weekly data is due at 9:30 AM CST
- U.S. Crude Inventories: + 4,405 MBbls (Avg. Bloomberg surveys)
- U.S. Gasoline Inventories: – 3,643 MBbls
- U.S. Distillate Inventories: – 3,492 MBbls
- U.S. Refinery Utilization: – 0.01% change
- Natural gas is down 9.7c to $1.632/MMBtu
- The total HDD count for March is currently estimated at 515, good enough to be the third warmest March of all time (Commodity Weather Group)
- While it may be early, April’s total HDD forecast is currently at 317, good enough to be just outside the top-ten warmest Aprils of all time
- Despite the collapse of oil prices, oil-indexed LNG contracts are unlikely to see a boon in demand
- For many Asian LNG contracts, they are tied to the Japan Crude Cocktail (JCC) which determines its price through a blend of oil prices that operate on a two-to-three-month lag
- LNG does, however, face a risk from slowing industrial demand around the world and high global stocks following this past warm winter
- ConocoPhillips announced they will be reducing capital expenditures by $700 million, a reduction of roughly 10%, and will be reviewing capital and operating plans moving forward
- They will also slow their share buyback program, saving roughly $2.2 Billion in cash for 2020
- Parsley is reducing CAPEX from $1.6-$1.8 Billion to less than $1.0 Billion
