March 4, 2020

March 4, 2020
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  • WTI is up 93c to $48.11/Bbl, and Brent is up 95c to $52.81/Bbl
  • Saudi Arabia is urging OPEC+ to cut more than 1 MMBbls/d to help offset the demand loss from the coronavirus outbreak (Bloomberg)
    • A cut of 1.2 MMBbls/d has been proposed, however Russia appears unwilling to comply with a cut of that size
    • OPEC’s technical committee was originally only planning on a 600 to 1,000 MBbls/d cut, for the second quarter, as of yesterday
    • The threat of Libya bringing back 1 MMBbls/d could nullify these proposed cuts despite the fact that OPEC is already withholding 2.5 MMBbls/d from global oil markets
  • The API reported a build of 1,690 MBbls/d for the week ending February 28
    • Analyst estimates call for a somewhat larger build, from the EIA, of 2,854 MBbls/d for the same time period
  • Natural gas is up 0.5c to $1.805/MMBtu
  • EQT released 2020 production guidance of 1,450 – 1,500 Bcfe, this would equate to relatively flat year-over-year production growth (Bloomberg)
    • The producer is also anticipating 2020 CAPEX to be in the range of $1.15 – $1.25 Billion, an approximate 25% reduction from last year’s CAPEX of $1.6 Billion
    • Many Appalachia producers have indicated that they will be ramping down production growth to “maintenance levels” as current forward strips remain at or near uneconomic levels
  • The Fed cut interest rates on Tuesday by 50 basis points in an attempt to quell fears surrounding the coronavirus’ economic impact
    • The U.S. interest rate now stands at just below 1.25 percent, down from the previous 1.75 percent
    • Equity markets sold off following the FED announcement as an interest rate cut of this size suggests the coronavirus may be having a more severe economic impact than previously believed

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