- WTI is down 34c to $32.47/Bbl, and Brent is down 6c to $34.68/Bbl
- Oil prices were down on Thursday morning after U.S. industry data showed a surprisingly large build in crude oil stocks
- The build, reported from the American Petroleum Institute (API), was very unexpected as U.S. producers have shut-in a portion of production which has led to stock withdrawals in previous weeks
- Data from the API showed U.S. crude stocks rose by 8.7 MMBbl in the week to May 22, compared to analyst’ expectations for a draw of 1.9 MMBbl
- Saudi Arabia and Russia agreed to closely coordinate on the OPEC+ out cuts deal, two weeks ahead of a crucial meeting of the group (Bloomberg)
- The talks come as Russia was said to be determined to start easing oil-output cuts in July, as agreed by OPEC+ in April
- OPEC+ will hold online meetings on June 9-10 to discuss their current policy and if they should extend their record production cuts
- EIA weekly data is due at 10:00 AM CST
- U.S. Crude Inventories: – 1,275 MBbls (Avg. Bloomberg surveys)
- U.S. Gasoline Inventories: – 150 MBbls
- U.S. Distillate Inventories: + 2,274 MBbls
- U.S. Refinery Utilization: + 1.00% change
- Natural gas is down 0.2c to $1.884/MMBtu
- The Commodity Weather Group is currently forecasting June to be one of the top-ten warmest on record in terms of population-weighted Cooling Degree Days (CDD)
- The current forecast calls for 270 CDDs compared to the 30-year normal of 230 and the 10-year normal of 264
- Analysts expect a 101-Bcf injection for the week ending May 22 (Platts)
- This would be below both the 110-Bcf injection reported in the corresponding week last year, and the five-year average of 93 Bcf
- Analyst injection estimates ranged from a low of 88 Bcf to a high of 114 Bcf
- A withdrawal within expectations would increase the surplus to the five-year average to 415 Bcf with total stocks at 2.604 Tcf
- Goldman Sachs forecasts that LNG arbs, for domestic exporters, will be out of the money until November
- The Dutch TTF prompt-month contract, known as the European gas benchmark, continues to slide lower with the last settle at $1.19/MMBtu
- JKM prices have fallen slightly below $2.00/MMBtu
- Other analyst forecasts have called the domestic LNG arbitrage to be closed until September
