November 18, 2020

November 18, 2020
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  • WTI is up 47c to $41.90/Bbl, and Brent is up 64c to $44.39/Bbl
  • China had its first implied decline in oil inventories since October 2017 (Bloomberg)
    • Implied inventory changes are calculated by subtracting refinery runs from the combined total of imports and domestic production
    • AEGIS notes China has remained a bright spot for demand, helping to offset losses in Europe and the U.S.
  • Saudi Energy Minister says the jury is still out on extending OPEC+ output cuts
    • The Saudi Energy minister reiterated that OPEC+ has the ability bring stability to the markets and will continue to seek it
    • Libyan production was acknowledged during the call, with the minister saying that the country’s output will be revisited once it reaches 1.2 MMBbl/d. The country is currently producing 1.145 MMBbl/d, giving it around 55 MBbl/d of additional output before OPEC+ may request some cooperation from the country
  • EIA weekly data is due at 9:30 am CST
    • S. Crude Inventories: + 1,240 MBbls (Avg. Bloomberg surveys)
    • S. Gasoline Inventories: + 62 MBbls
    • S. Distillate Inventories: – 1,960 MBbls
    • S. Refinery Utilization: + 0.66% change
  • Natural gas is up 4.3c to $2.735/MMBtu
  • A gas injection is likely to be reported later than what is typical as low res-comm demand leaves more supply in the market
    • The U.S. Energy Information Administration (EIA) is expected to report a 17 Bcf injection for the week ended Nov. 13, according to a survey of Bloomberg analysts
    • This time last year was vastly different with the EIA reporting a 66 Bcf withdrawal for the same corresponding week
    • AEGIS notes that Lower 48 gas injections typically switch to gas withdrawals around Nov. 15, but injections will last one more week
      • A cold front in late October allowed for a rare early withdrawal, but the two weeks since then have been a period of low res-comm demand
  • Gulfport Energy is asking a federal bankruptcy court to reject the Utica Shale gas producers’ firm gas transport agreements with Rockies Express Pipeline (REX), Rover Pipeline and several TC Energy units, and, to block FERC actions that might takeover the court’s role (Platts)
    • If successful, Gulfport would save $18 million in net cost per year, or about $222 million over the remaining term of the firm agreements, according to the company
    • Commitments to TC Energy make Gulfport liable for $700 million in aggregate gross costs for remaining firm transport terms
    • Disputes on breaking these contracts are closely watched as multiple oil and gas companies that have filed bankruptcy challenge their own

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