March 27, 2020

March 27, 2020
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  • WTI is down 53c to $22.07/Bbl, and Brent is down 94c to $25.40/Bbl
  • Russia says a new larger OPEC+ might be possible if other countries join in (Reuters)
    • Kirill Dmitriev, head of Russia’s sovereign wealth fund told Reuters “Joint actions by countries are needed to restore the global economy…they (joint actions) are also possible in OPEC+ deal’s framework”
    • Dmitriev and Energy Minister Alexander Novak were Russia’s top representatives in the OPEC+ alliance
  • A group of WTI time-spreads fell to the weakest settlements in more than nine years on Thursday. Also, Brent month 1-month 6 spread weakened beyond -$10/Bbl (Bloomberg)
    • Light Louisiana Sweet’s spread to WTI weakened -$3.50 to -$4.50/Bbl on Thursday; the weakest in data going back to May 1991
    • Western Canada Select’s (WCS) discount to WTI at Cushing widened $1.40 to -$16.40/Bbl on Thursday. WCS is now trading under $7/Bbl
  • The Trump administration halted plans to buy oil for the Strategic Petroleum Reserve (SPR) after failing to win funding from Congress
    • The DOE said Wednesday that it was withdrawing a March 19 tender for the first part of its plan to purchase 77 MMBbl for the reserve
    • It’s possible the DOE might come up with the money in its own budget to fund the purchase, according to some familiar with congressional appropriations
  • Natural gas is down 1.9c to $1.618/MMBtu
  • An LNG tanker, that was loaded from a Cameron terminal, is signaling China as its destination, according to Bloomberg
    • Back in January, China allowed companies to apply for a waiver on the 25% import tariff on U.S. LNG as part of the Phase-One trade deal – the only exception being that purchased U.S. cargoes must be economic
    • China has not received a U.S. LNG cargo since April 2019 due to retaliatory tariff disputes
    • AEGIS notes that gaining access back to Chinese markets could help offset what is becoming an increasingly competitive LNG market for U.S. natural gas exporters
  • India’s quarantine notice is already having a noticeable effect on global LNG markets as many Indian LNG importers issue force majeure notices to suppliers
    • Qatargas, a major supplier of LNG to India, is said to now be offering multiple cargos for loading, in April, to buyers in both Asia and Europe, according to Reuters
    • JKM prices, the Asian LNG benchmark, have fallen $0.50/MMBtu over the last week to below $3.00/MMBtu
    • TTF prices, the European gas benchmark, reached an all-time low of $7.57 EUR/MWh or roughly $2.44/MMBtu
  • The EIA reported a draw of -29 Bcf for the week ending March 20, this was equal to the median analyst estimate
    • The surplus to the five-year average increased to 292 Bcf, while total stocks now stand a hair above 2.0 Tcf

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