November 1, 2019

November 1, 2019
Print Friendly, PDF & Email
  • WTI is up 75c to $54.93/Bbl, and Brent is up 3c to $60.26/Bbl
  • Oil is on pace for its biggest weekly loss since late September as US crude stocks grew and doubts about a longer-term trade deal between the US and China (Bloomberg)
    • China said they will not budge some of the biggest issues
  • Western Canadian Select’s (WCS) discount to WTI at Cushing fell to -$19/Bbl on Thursday, the widest since early December as the Keystone crude pipeline remained shut, keeping some crude stranded in Canada
    • The outage of Keystone stands to affect US Gulf Coast refiners looking for alternative heavy crude supplies as Venezuela is still sanctioned by the US
    • The oil spill on Keystone is the third along the route in less than three years
  • Natural gas is down 2.8c to $2.605/MMBtu
  • EQT provided some insights on the macro gas environment and Appalachian market dynamics on their third quarter earnings call
    • The company believes there needs to be 50 rigs to maintain production flat in the Appalachia, current rig count in the region stands at 52
    • Given current strip pricing, maintenance capital is not enough to keep production flat without exceeding free cash flow, according to CEO Toby Rice
      • Production declines could show up in the back half of 2020 and support price
    • EQT expects their production to remain flat in 2020
      • Production could also remain flat in 2021, growth will depend on the price environment
      • Focus is on trying to reduce costs in order to grow at $2.50 gas
  • Some heat is starting to emerge in the 11-to-15 day forecast across the Western and Southwestern portions of the United States, including Texas
    • Populous demand regions in the Northeast are still forecasting colder than normal temperatures
    • Fundamentally, very little has changed in markets. Supply remains near record levels.
  • The EIA reported a build of 89 Bcf for the week ending October 25, the corresponding build last year was 49 Bcf
    • Total storage, which stands at 3.7 Tcf, is at a surplus of 559 Bcf compared to last year and 52 Bcf compared to the five-year average
    • Given the emergence of early winter weather, we could start to see minor builds or withdrawals earlier than expected

Access Our Deeper Market Insights

Product Factor Matrix

Proprietary view of priced-in factors driving the market vs. potential bullish and bearish surprises.

Learn More

Trading Recommendations

Clear trading recommendations based on real market opportunities that enable clients to take action.

Learn More

Market Data

A comprehensive suite of the latest curves, spot pricing, settles, and strips to drive confident hedging decisions.

Learn More

Benchmarking and Trade Analytics

Real-time access to analyze your hedging strategy against AEGIS benchmarks and current market activity.

Learn More