May 20, 2020

May 20, 2020
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  • WTI is up 82c to $32.78/Bbl, and Brent is up 94c to $35.59/Bbl
  • Oil futures stay steady after a four-day gain
    • The WTI prompt contract versus the next contract month moved back into contango on Wednesday as the June contract expired on Tuesday
    • There was no repeat of last month’s negative pricing after the June contract finished higher than July, thanks to massive U.S. and global production cuts
  • Crude oil held at sea on tankers has dipped to 170 MMBbl as of May 15, the second decline in three weeks (Vortexa)
    • Global floating storage had previously been stationary for at least seven days prior to the recent decline
    • AEGIS notes that signs of a decline in floating storage could indicate a return of demand and or tighter spreads between individual futures contracts. The severity of contango in the curve has moderated, making most new storage trades at sea uneconomic
  • EIA weekly data is due at 9:30 AM CST
    • U.S. Crude Inventories:                  +       1,808 MBbls (Avg. Bloomberg surveys)
    • U.S. Gasoline Inventories:             –       2,736 MBbls
    • U.S. Distillate Inventories:             +      1,711 MBbls
    • U.S. Refinery Utilization:               +       1.04% change
  • Natural gas is up 4.7c to $1.877/MMBtu
  • Kinder Morgan to return Elba LNG Units 1 and 3 to service this week
    • A compressor fire located near Unit 2 at the facility last week caused the company to shutdown units 1-3
    • Unit 2 will remain off-line for repairs
  • Flows coming out of the Appalachia are down by 1.4 Bcf/d since May 15 (PointLogic)
    • This comes following EQM’s announcement on May 18, that their largest producing customer will be curtailing production by up to 1.4 Bcf/d for 45 days
    • The cut in production has the potential to provide support to Appalachian prices until the production is brought back online

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