November 19, 2019

November 19, 2019
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  • WTI is down 77c to $56.28/Bbl, and Brent is down 74c to $61.70/Bbl
  • The amount of drilled but uncompleted (DUC) wells in major US shale basis fell by 225 to 7,642 in October, the EIA said on Monday
    • The drop in October marked the fifth straight month of declines and shows that producers are running through their inventory of DUC wells while also scaling back drilling
    • DUC wells in the Permian fell by 45 to 3,589 in October. This was the third month of declines after 16 straight months of increases
  • Waterborne vessels that haul all sorts of commodities are having difficulty obtaining the fuels they need to test them for the start of IMO 2020 (Bloomberg)
    • Tramp ships, as the are called, an old industry term for vessels that don’t follow fixed trade routes, urgently need supplies to ensure safe operation when the new rules take effect, according to the chairman of the International Association of Dry Cargo Shipowners
    • IMO 2020, which goes into effect on Jan. 1, 2020, requires merchant vessels to use a fuel with dramatically less sulfur than what is allowed today
    • The spread between high-sulfur and low-sulfur fuel oil prices have soared in Europe. Low-sulfur fuel oil prices have widened out to $282/ton versus high-sulfur fuel oil after trading close to ~$120/ton on average for the last year
  • Natural gas is down 4.8c to $2.518/MMBtu
  • Whistler Pipeline, the Permian’s third FID 2.0 Bcf/d pipeline, is conducting a binding open season for its uncontracted capacity
    • The pipeline appears to still be on target for its mid-2021 in-service date as construction begins in 2020
    • The time schedule of this project will continue to be very important to the dynamics of the region following the Permian Highway’s delay till 1H2021
  • Mild weather forecasts continue to drive the selloff in prompt month gas prices as the 11-to-15-day forecast now encompasses the start of December
    • It should be noted that both the European and American weather models are still forecasting conflicting views
    • A stronger than expected storage withdrawal this week could help provide some downside resistance
  • Cheniere has started construction on their 0.4 Bcf/d Sabine Pass Compression Project
    • The development of this compressor likely coincides with the company’s plan to expand the company’s existing trains and construct their sixth train at Sabine Pass
    • Feed gas continues to remain above the 7.0 Bcf/d mark as today’s flows come in at 7.5 Bcf/d (Platts)

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