March 3, 2021

March 3, 2021
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  • WTI is up 68c to $60.43/Bbl, and Brent is up 68c to $63.38/Bbl
  • OPEC+ to debate increasing production by 1.5 MMBbl/d in March
    • There is a widespread view within the group that the market could absorb the additional supply, according to Bloomberg
    • Even if OPEC+ boost production by 2.4 MMBbl/d (maximum amount under the current deal) between Feb. and Jun., It would still be able to clear out inventories from the 2020 supply glut by August, according to data presented by the JTC on Tuesday
  • Texas becomes the largest state to lift its mandatory COVID-19 mask mandate
    • Additionally, Texas-Governor Greg Abbott announced that all businesses would be allowed to open at full capacity starting March 10
    • AEGIS notes the move comes as the state ramps up its vaccination program, which has contributed to declining hospitalization rates. If other states follow suit, demand for crude and refined products could rise, which could support price
  • EIA weekly data is due at 9:30 am CST
    • U.S. Crude Inventories: – 735 MBbls (Avg. Bloomberg surveys)
    • U.S. Gasoline Inventories: – 2,087 MBbls
    • U.S. Distillate Inventories: – 3,484 MBbls
    • U.S. Refinery Utilization: + 4.13% change
  • Natural gas is up 4.4c to $2.883/MMBtu
  • The return of offline gas production, combined with low heating demand, is expected to lead to a -147 Bcf withdrawal in underground storage for the week ended February 26 (Bloomberg estimates)
    • If confirmed on Thursday, the withdrawal would be less than half the near record pull of 338 Bcf for the week ended February 19, but still stronger than the five-year average
    • Production has returned to near pre-winter storm levels of just over 90 Bcf/d. This is nearly a 20 Bcf/d recovery from the low set on February 17 (PointLogic)
  • Waha basis continues to inch closer to trading at parity with Henry Hub for the Winter 2021-2022 strip
    • In just under a month, Winter Waha basis has rallied about 20c to settle at -$.005 on February 3, according to Bloomberg data
    • Looking intraday on February 25, the basis traded in positive territory for the Winter strip on ICE at +$0.02
      • Clients can view historical settles and forward curves on the AEGIS Research tab

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