March 20, 2020

March 20, 2020
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  • WTI is down 26c to $24.96/Bbl, and Brent is up 11c to $28.58/Bbl
  • Oil prices rose by the most on record Thursday, a day after they fell over 24%, in terms of percentage points
    • Thursday’s rally was partly due to public comments by President Trump about intervening with the Saudis price war
    • The rally was also carried by the unprecedented amount of fiscal stimulus. The world’s richest nations are injecting stimulus into the global economy to help offset the demand losses due to the coronavirus
  • In Texas, some oil producers are asking the state regulator to consider curtailing the amount of oil companies can pump (Reuters)
    • The state has not implemented output limits since the 1970’s
    • Parsley Energy and Pioneer Natural Resources are two companies wanting regulators to step-in. “We’re looking for stabilization to keep American workers employed as much as possible.”, said Mike Gallagher, CEO of Parsley
    • The Wall Street Journal reported that several unnamed companies were pushing the idea on Thursday
  • Oil and gas producers globally have cut at least $31 billion from investment budgets following oil’s crash, with more cuts likely to come (Bloomberg)
  • Natural gas is up 2.0c to $1.674/MMBtu
  • FERC has approved the 1.0 Bcf/d Jordan Cove LNG export facility in Oregon, the first west coast export facility to receive approval
    • The project could enter service by 2025 at the earliest, but still has three key permits with the state of Oregon that need to be approved
    • FERC also approved the 1 Bcf/d Pacific Connector Gas Pipeline, which will run from the Malin Hub to the export facility
  • Midcontinent basis has seen steady improvement over the last several months
    • OneOk basis has improved by roughly $0.30/MMBtu, NGPL Midcon has improved by $0.20/MMBtu, Panhandle has been flat, but is up $0.15/MMBtu since its November low
    • AEGIS notes that with the possibility of declining associated gas in the Permian, it may be beneficial to lock in basis hedges for Midcontinent-related basis given the recent improvements

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