May 18, 2020

May 18, 2020
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  • WTI is up $2.84 to $32.27/Bbl, and Brent is up $2.13 to $34.63/Bbl
  • Oil futures rose above $30/Bbl for the first time in two months as U.S. producers continue to reduce supply
    • The number of drilling rigs in the U.S. fell for a ninth week to levels not seen in more than a decade
    • Also last week, oil stockpiles at Cushing, Oklahoma, shrank for the first time since late February
  • Baker Hughes reported the number of oil rigs declined by 34 last week to now total 258
    • The Permian basin lost 23 rigs to stand at 175, down 279 y-o-y
    • Cana Woodford stands at four rigs, down from 48 a year ago
    • The Eagle Ford has 24 active rigs, down from 74 this time last year
  • Speculators have increased their net-long positions in WTI to the most bullish since 3Q2018
    • Net-longs, the difference between outright long and short contracts, stand at 325k
    • Hedge funds have continued to add length over the past two months from a low of 100k net-long contracts on March 3
  • Natural gas is up 9.6c to $1.742/MMBtu
  • New York denies permit for Williams PA-NY Northeast Supply Pipe
    • Williams has said the project, which includes an offshore pipe between New Jersey and Long Island, New York, will cost about $1 billion and could enter service in time for winter 2021 heating season
    • New York environmental regulators on Friday denied a water permit for Williams Cos Inc’s proposed Northeast Supply Enhancement (NESE) natural gas pipeline
  • India’s natural gas demand has risen by a third, from recent lows, as lock down restrictions ease and factories ramp up production (Bloomberg)
    • Despite signs of recovery, the company has asked to defer some LNG cargoes and that the gap between spot LNG and oil-linked LNG prices is standing in the way of consumption
    • India is the world’s fourth largest LNG importer and will have roughly 7.7 Bcf/d of LNG import capacity by 2023
  • Manage money short positions grew by 36,799 contracts to total -201,421 contracts
    • Managed Money long positions fell by 19,430 contracts to total 196,698 contracts
    • Despite being net positive for the last three weeks, positioning has returned to net-short by 4,723 contracts

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