March 2, 2020

March 2, 2020
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  • WTI is up 91c to $45.67/Bbl, and Brent is up 70c to $50.37/Bbl
  • Oil prices are higher this morning on hopes that OPEC+ will make deeper cuts and that central bank stimulus will counter demand damage
    • OPEC and its allies are contemplating an additional oil output cut in 2Q, in response to eroded demand from the virus outbreak
    • The group’s technical committee has previously suggested an additional 600 MBbl/d cut, but last week reports said Saudi Arabia was pushing for an additional 1 MMBbl/d
  • Phillips 66 and trading firm Trafigura have formed a joint venture to construct an oil tanker loading port in deepwater of the Texas coast (Reuters)
    • The port is to be located 21 nautical miles east of the Port of Corpus Christi and will have two single-point mooring buoys
    • Trafigura withdrew its own application to develop a Texas Gulf Terminals deepwater port facility submitted in summer of 2018, the company said (Argus)
    • AEGIS notes that many export ports along the Texas gulf have been proposed as current ports are unable to handle the largest supertankers
  • An important energy industry gathering was canceled by organizer IHS Markit on Sunday amid the coronavirus outbreak (Bloomberg)
    • CERAWeek is an annual industry meeting in Houston and has become an important forum for oil’s biggest players
  • Natural gas is up 3.5c to $1.719/MMBtu
  • During 4Q2019 earnings calls, many Appalachian producers are planning on CAPEX reductions of 20% or more in 2020
    • Planned production growth rates ranged anywhere from flat to high single digits for many producers
    • AEGIS notes that CAPEX cuts in 2020 could lead to faster production declines in 2021 as drilling momentum slows
  • The CFTC reported that managed money short positions increased 5,676 contracts to total 473,407 contracts, this did not include the large selloff from Wednesday through Friday
    • Managed money long positions fell 21,995 contracts to total 163,255 contracts
  • Sempra’s Cameron Train 2 has officially started commercial operations
    • The third and final train is expected to be begin initial production in 2Q2020
    • U.S. feed gas demand currently stands at 8.3 Bcf

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