- WTI is up $1.22 to $25.36/Bbl, and Brent is up 63c to $30.26/Bbl
- Oil prices moved higher this morning as signs of demand returned following the easing of lockdowns in some regions (Bloomberg)
- While a huge glut remains, clusters of fuel demand are starting to show up in India and China, helping global oil storage builds to slow
- Heavy Canadian crude settled at the narrowest difference to WTI yesterday, according to data going back to May 2008
- Western Canada Select’s (WCS) discount to WTI narrowed to -$3.05/Bbl on Monday
- WCS has rallied versus the U.S. benchmark as producers in Canada shutter some heavy oil production or begin maintenance early amid depressed oil prices (Bloomberg)
- Prices also received a lift as additional OPEC+ cuts include heavy sour crudes that compete with WCS
- Continental Resources said it shut in 70 percent of its oil production in May, the largest reduction among medium-sized U.S. Independents
- The company had initially forecast a 30 percent decline for April and May
- Harold Hamm’s company is operating five rigs now and one completion team in Oklahoma, none in the Bakken
- Natural gas is down 3.1c to $1.795/MMBtu
- TETCO has provided an update on the Line 10 outage, near Owingsville Compressor Station
- The company announced, “At this time, TE anticipates it will continue to restrict to zero, for a minimum of, an additional two to three weeks from today.”
- The Texas Eastern outage has caused 460 MMcf/d in gas headed for markets in the South East and Gulf Coast be redirected into neighboring markets in the Midwest
- During Monday’s trading session both Dominion South and TETCO M-2 cash prices were up 10c, with downstream locations- Texas Eastern M-3, Transco Zone-6, and Algonquin City Gates trading nearly 20c higher
- Energy Transfer is reducing capex and deferring some projects according to their most recent earnings call
- The 400 MBbls/d Permian-based NGL pipeline, Lone Star Express, will still complete its expansion in 4Q2020
- Frac VIII at Mont Belvieu is being deferred until 1Q2022
- The 250 MBbls/d Appalachia-based NGL pipeline, Mariner East 2X, is expected to be in service in 1Q2021
- Energy Transfer also stated that they will still move forward with developing the 1.8 Bcf/d Lake Charles LNG facility, despite Shell backing out of the venture
- U.S. LNG feedgas demand has fallen by 1 Bcf to total 6.5 Bcf (PointLogic)
- The decline can be attributed to receipts from the Sabine Pass LNG Terminal, down 811 MMcf/d, and Freeport LNG, down 148 MMcf/d
- It is unclear whether the decline is due to maintenance or cargo cancellations
