November 14, 2019

November 14, 2019
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  • WTI is up 40c to $57.52/Bbl, and Brent is up 55c to $62.92/Bbl
  • The EIA increased its US crude production estimates for 2019 and 2020 on Wednesday in its monthly Short-Term Energy Outlook
    • US domestic production will average 12.29 MMBbl/d this year, an increase of 0.2% from last month’s forecast
    • Production forecast in 2020 was also increased by 0.9% to 13.29 MMBbl/d
    • AEGIS notes that the increased production forecast comes as a surprise given that producers are reigning in spending
    • The EIA also said that global oil prices will drop in 2020 because of forecast rising global inventories, mostly in the first half of the year
  • OPEC still believes the market will be over supplied in early 2020
    • Global supplies will exceed demand by about 645 MBbl/d in 1H20 if OPEC keeps output at current levels, according to the group’s monthly report (Bloomberg)
    • Even with this prediction, officials from OPEC nations have said publicly they won’t cut production deeper to offset rising supply
  • EIA weekly data is due at 10:00 AM CST
    • U.S. Crude Inventories:                  +      1,440 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:             –      1,385 MBbls
    • U.S. Distillate Inventories:             –      1,160 MBbls
    • U.S. Refinery Utilization:               +       1.01% change
  • Natural gas is up 7.7c to $2.677/MMBtu
  • Analysts expect a 7 Bcf build for the week ending November 8, this would be 35 Bcf less than the 42 Bcf build in the corresponding week last year
    • Estimates ranged from a unchancged to a 12 Bcf build
    • Next week is forecasted to mark the first (or next) withdrawal of the season with many analysts predicting a withdrawal around 90 Bcf
  • Commodity Weather Group notes that there is currently a 31 HDD gap between the American and European forecasting models
    • They suggest that given such a large difference between the models, there could be some significant shifts in the HDD forecast for November within the next 24 hours
    • Assuming either extreme, the American model would have this as the 4th coldest November of all-time while the European model would have this as the 11th coldest of all-time
  • Flows on the Sur de Texas (SdT) are nearing 1.0 Bcf/d, well above their 0.7 Bcf/d 30-day average (PointLogic)
    • The pipeline has a capacity of 2.6 Bcf/d, however, AEGIS has noted in the past that this line will likely flow at reduced rates until the Tuxpan-Tula and Tula-Villa de Reyes extensions come online
    • These lines are meant to extend the SdT’s reach into South-central Mexico

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