March 3, 2020

March 3, 2020
Share
Print Friendly, PDF & Email
  • WTI is up $1.18 to $47.93/Bbl, and Brent is up $1.17 to $53.07/Bbl
  • Oil prices are higher again this morning on expectations that central banks will provide stimulus and hopes that OPEC will agree on deeper cuts this week (Reuters)
    • G-7 finance ministers will discuss how best to lessen the impact of the virus outbreak on economic growth this week, according to French Finance Minister Le Maire
    • OPEC and its allies are mulling a 1 MMBbl/d cut
    • AEGIS notes that deeper cuts by OPEC may not have the impact as previous cuts have had. Peak oil demand loss from the coronavirus is around 4 MMBbl/d in late February, OPEC’s potential deeper cuts can only do so much
  • Canadian oil prices has recently gained strength with both heavy and light grades of oil from Alberta at the tightest discounts to WTI futures since October
    • Enbridge told shippers it had extra capacity available in its light oil export lines in March, possibly indicating tighter supply (Bloomberg)
    • Rising crude-by-rail shipments and new pipeline capacity coming online has helped narrow Western Canadian Select’s discount from -$25/Bbl in early January to about -$14/Bbl
  • Natural gas is up 3.3c to $1.789/MMBtu
  • Waha cash prices have dipped negative to $-0.64/MMbtu fixed price, the lowest they have been since May 2019
    • Despite cash prices going negative, Waha futures have seen a roughly $0.20/MMBtu to $0.30/MMBtu pop across all seasonal strips through 2021
  • Tellurian’s 3.6 Bcf/d Driftwood LNG facility is facing increasing pressures as securing long-term offtake agreements and financing in the project is moving slower than expected
    • Australia LNG’s 1.0 Bcf/d Magnolia LNG facility is facing similar issues as the company is currently considering a buyout offer for the project
    • AEGIS notes that given current global LNG market conditions, there is a possibility that only some of the “Phase Two” projects end up being completed on time or completed at all
    • This, in turn, could extend the length of the period from 2H2020 to 1H2022 where there is only one new LNG train planned to come online
    • LNG feed gas demand is down to 7.4 Bcf, a 0.7 Bcf drop from yesterday’s levels

Access Our Deeper Market Insights

Product Factor Matrix

Proprietary view of priced-in factors driving the market vs. potential bullish and bearish surprises.

Learn More

Trading Recommendations

Clear trading recommendations based on real market opportunities that enable clients to take action.

Learn More

Market Data

A comprehensive suite of the latest curves, spot pricing, settles, and strips to drive confident hedging decisions.

Learn More

Benchmarking and Trade Analytics

Real-time access to analyze your hedging strategy against AEGIS benchmarks and current market activity.

Learn More