May 6, 2020

May 6, 2020
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  • WTI is down $1.40 to $23.16/Bbl, and Brent is down $1.07 to $29.90/Bbl
  • Brent crude near $30/Bbl on Wednesday morning as some countries ease coronavirus lockdowns (Reuters)
    • Some U.S. states, along with Spain, Italy, and India, have begun allowing people to return to work
    • Other counties like Germany have plans to start reopening soon
  • Plains All American Pipeline LP expects Permian Basin oil production to fall 15-20% on a exit-to-exit basis, executives said on the company’s Q1 earnings call
    • Plains sees close to 1 MMBbl/d of Permian shut-ins in May
    • Producer activity may return some time in August, according to the company
    • The midstream company estimates North America producers shut-in 3-4 MMBbl/d of output due to May ‘price signals”
  • EIA weekly data is due at 9:30 AM CST
    • U.S. Crude Inventories:                  +       8,666 MBbls (Avg. Bloomberg surveys)
    • U.S. Gasoline Inventories:             +           495 MBbls
    • U.S. Distillate Inventories:             +       2,880 MBbls
    • U.S. Refinery Utilization:               +       0.57% change
  • Natural gas is down 10.6c to $2.028/MMBtu
  • The explosion on the Texas Eastern pipeline sent TETCO M2 and Dominion South basis lower by about 12-14c for the prompt month and 10-11c for the balance of Summer ’20 (See full AEGIS View commentary here)
    • The TETCO outage’s downstream effect is likely to bolster the Henry Hub market and “Haynesville” area prices
    • The pipeline outage has an unknown duration and will continue to keep southbound capacity, from the Appalachia, reduced by 1.4 Bcf/d
  • Goldman Sachs is raising their natural gas price forecast for the rest of summer to $2.05/MMBtu, up from $1.85/MMBtu (Bloomberg)
    • They forecast natural gas production to fall by 0.9 Bcf/d in the summer of 2020
    • U.S. natural gas storage could still reach capacity by the end of injection season, especially as 2.5-3.0 Bcf/d of LNG cargoes risk cancellation in June, according to the bank

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