March 9, 2020

March 9, 2020
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  • WTI is down 965c to $31.63/Bbl, and Brent is down 1040c to $34.87/Bbl
  • Oil prices fell 31%, in a matter of seconds, at the start of trading yesterday, equating to the second-worst single-day loss on record for both Brent and WTI
    • The oil price collapse was the result of Saudi Arabia lowering their official selling price (OSP) into Europe by $8, the deepest cut to the country’s main grades in nearly 20 years
    • OPEC members will also no longer be required to abide by production cuts come April 1
    • This decision comes after OPEC and Russia failed to reach an agreement to curb an additional 1.5 MMBbls/d of production
    • Aramco has allegedly told some market participants that they could raise production above 10 MMBbls/d by next month, they have the capacity to reach 12 MMBbls/d of output
    • Saudi Arabia currently produces approximately 9.7 MMBbls/d
  • According to Bloomberg, more than 115,000 Brent and WTI prompt-month contracts changed hand in the first hour of trading yesterday
    • This amount of activity exceeded the volume that was done in the first hour of trading after the Saudi oil attack
    • The CFTC reported that managed money short positions increased from 81,417 contracts to total 112,980 contracts
    • This number does not include Friday or Sunday’s selloff and is likely much higher now
  • Natural gas is down 6.6c to $1.642/MMBtu
  • March’s Heating Degree Day forecast has been revised lower to 535 HDDs total; this would make it the fifth warmest March of all time according to the Commodity Weather Group
    • Prompt-month natural gas prices recently hit 21-year lows
  • The CFTC reported that managed money short positions, in natural gas, fell from 473,574 contracts total to 435,557
    • Managed money long positions also fell from 163,880 contracts to 146,006 total
  • NextDecade’s 3.5 Bcf/d Rio Grande LNG facility received FERC approval to move forward with site preparation
    • The company has yet to make a Final Investment Decision (FID), but is targeting sometime in 2020

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