March 24, 2021

March 24, 2021
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  • WTI is up $1.67 to $59.43/Bbl, and Brent is up $1.72 to $62.51/Bbl.
  • A downed ship in the Suez Canal has left dozens of vessels gridlocked, pushing oil prices higher this morning (Bloomberg)
    • The incident was expected to knock out traffic for several days initially, though new reports suggest the obstruction could be cleared as soon as today or tomorrow
    • The Suez Canal is responsible for around 12% of global trade and 8% of LNG, making it one of the most trafficked waterways in the world
  • OPEC+ should continue output limits or even increase its supply cuts in April in response to market softness – Citi
    • The bank said that the recent price drop has been driven by financial flows, rather than a change in fundamentals, and said oil “should only have one way to go – up.”
    • Citi projects Brent will average $62 in 1Q and $70 in 2Q
  • EIA weekly data is due at 9:30 am CST
    • U.S. Crude Inventories: + 704 MBbls (Avg. Bloomberg surveys)
    • U.S. Gasoline Inventories: + 1,102 MBbls
    • U.S. Distillate Inventories: – 45.30 MBbls
    • U.S. Refinery Utilization: 2.91% change
  • Natural gas flows into U.S. LNG facilities could soon suffer due to spring maintenance (Platts)
    • LNG demand in the U.S. has been running at record rates, but turnarounds are likely coming as four trains are approaching the one-year mark of service, according to S&P data
    • LNG facilities and LNG serving infrastructure affected:
      • A Compressor station serving Cheniere’s Corpus Christi Pipeline will be offline for an annual emergency shutdown on April 8
      • Cameron Interstate Pipeline, which feeds Sempra Energy’s Cameron LNG terminal, offered up to 100 MMcf/d of firm gas transport from March 26-April14
        • This implies The LNG facility would not need the gas for that time period
      • Boardwalk Pipeline Partners’ Gulf South Pipeline, which feeds Freeport LNG, will be performing maintenance on several compressor stations March 30-April 24, according to notices to customers
  • The U.S. Energy Information Administration is expected to report a 22 Bcf withdrawal for the week ended March 19, according to Bloomberg’s survey of economist
    • A draw of 22 Bcf would be about half the five-year average, in what is possibly the last final net draw of the heating season
    • Demand destruction from the mid-February freeze remains an important variable in the South Central, according to Platts
      • On a weather-adjusted basis, ERCOT power loads remain weaker, indicating industrial consumption is still below pre-freeze levels

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