March 6, 2020

March 6, 2020
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  • WTI is down 213c to $43.77/Bbl, and Brent is down 211c to $47.88/Bbl
  • Crude prices plummet more than four percent as Russia rejects OPEC’s call for steeper cuts
    • The country is willing to wait until June to decide the correct course of action as they do not believe additional cuts are the answer
    • AGEIS notes that if OPEC attempts to compromise by making a small cut, oil prices could fall lower
    • If the whole 1.5 MMBbls/d cut is agreed to, it may only serve to staunch a further collapse in oil prices rather than increase them
    • OPEC’s delegate re-affirms the fact that it will not cut production without Russia
  • Several agencies including the IEA, Rystad, Redburn, and FGE are slashing demand estimates for 2020
    • Demand estimates range from a contraction of 480 MBbls/d to growth of only 500 MBbls/d
    • AEGIS notes that Libya’s 1.1 MMBbls/d of output, which is currently offline, further complicates the market’s supply and demand balance, especially if a deal is not reached
  • Natural gas is down 3.1c to $1.741/MMBtu
  • Midcoast Energy has reached a final investment decision on their CJ Express Pipeline
    • This decision was made 18 months after announcing their intention to add additional capacity in the Haynesville basin
    • The pipeline will increase the company’s ability to serve the Gulf Coast by 1 Bcf/d
    • Midcoast has estimated the pipeline will be completed in early 2021
  • Cheniere’s Sabine Pass Train 2 is offline, the company’s Sabine Pass Train 4 is also partially down as of yesterday
    • AEGIS has noted in the past that due to weak global LNG pricing, domestic LNG producers could be economically incentivized to take maintenance this Spring
    • Feed gas demand currently stands at 8.36 Bcf for the day
  • The EIA reported a withdrawal of -109 Bcf for the week ending February 28, this was slightly larger than the median estimate of a -105 Bcf withdrawal
    • Total stocks stand at 2.091 Tcf, a 176 Bcf surplus to the five-year average and a 680 Bcf surplus to last year
    • The withdrawal was less than the 152 Bcf pull in the corresponding week last year, but more than the five-year average of 106 Bcf

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