May 15, 2020

May 15, 2020
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  • WTI is up $1.03 to $28.59/Bbl, and Brent is up 88c to $32.01/Bbl
  • Oil prices are headed for a third week of gains on signs the market is slowly rebalancing (Bloomberg)
    • China’s industrial output increased in April for the first time since the outbreak
    • At the same time, Saudi Arabia has cut supply to its customers in the U.S., Europe and Asia as it reduces production
  • A flotilla of full oil tankers from Saudi Arabia headed to American shores is raising storage concerns just as U.S. storage is seeing relief from massive builds (Bloomberg)
    • Over 30 tankers are set to arrive in the U.S. Gulf Coast and West Coast during May and June, according to Bloomberg
    • The tankers total over 50 MMBbl of Saudi crude
    • “The expected Saudi deliveries could push U.S. inventories back to builds depending on their timing,” said Sandy Fielden of Morningstar
  • Natural gas is up 3.4c to $1.715/MMBtu
  • On Thursday, the EIA announced an injection of 103 Bcf for the week ending May 8, 2020
    • This injection was smaller than the 109-Bcf build reported a week earlier
    • Storage now stands 49%, or 799 Bcf, above last year’s levels of 1.623 Tcf
  • Gas flows have not been observed flowing to Elba LNG since Wednesday, May 13
    • Three units were affected by a compressor fire, forcing Kinder Morgan to bring them offline for repairs
    • Elba LNG is the smallest of the six major US LNG export terminal, with a planned capacity of 2.5 mt (.3275 Bcf/d) once all 10 trains are brought online
  • TETCO M-2 and dominion South cash prices hit year-to-date lows during yesterday’s trading session
    • The drop in prices can be attributed to warm temperature forecast in the northeast over the next few days coupled with high production levels (32.8 Bcf/d) not seen since Late 2019
    • The Texas Eastern outage near the Owingsville compressor station also gives producers less optionality on where to send their gas adding more downside pressure to cash prices

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