November 20, 2019

November 20, 2019
Share
Print Friendly, PDF & Email
  • WTI is up 51c to $55.72/Bbl, and Brent is up 54c to $61.45/Bbl
  • California’s governor Gavin Newson stepped up pressure on oil and gas producers by seeking reviews of all pending hydraulic fracturing permits and halting approvals of a key production technique in the area (Bloomberg)
    • Mr. Newson ordered regulators to assess the safety of high-pressure steamflooding
    • The state is also requesting third-party scientific reviews of any pending application for fracking
    • AEGIS notes that California producers about 440 MBbl/d of the total 12.6 MMBbl/d nationwide
  • Skew and diffs:
    • Brent crude’s put skew grew to the most bearish since mid-September following yesterday’s selloff
    • There is currently a five point spread between the 25 Delta Put (at 33.45 vol) and 25 Delta Call (at 29.31 vol), where the options market sees more risk to the downside
    • Western Canadian Select’s (WCS) discount to WTI at Cushing widened by $2.90 to -$18.90/Bbl on Tuesday
    • WCS has retreated relative to WTI amid rail strike. Crude-by-rail is heavily utilized in exporting to the US due to not enough pipeline capacity
  • EIA weekly data is due at 10:00 AM CST
    • U.S. Crude Inventories:                  +      1,148 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:             +         720 MBbls
    • U.S. Distillate Inventories:             –         883 MBbls
    • U.S. Refinery Utilization:               +       1.04% change
  • Natural gas is up 3.5c to $2.545/MMBtu
  • TC Energy is no longer providing an in-service date to the Tuxpan-Tula, an extension of the recently completed Sur de Texas (SdT) pipeline into central Mexico (Platts)
    • The project was last reported to enter service by 4Q2021 after disputes with locals over the pipeline have caused several years’ worth of delays
    • AEGIS notes that the delay of these extensions could continue to suppress flows on the 2.6 Bcf/d SdT which currently sit around 0.7 Bcf/d
  • FERC is moving in to address propane shortages in the Midwest (PointLogic)
    • Enterprise Products Pipeline Company may now switch a pipeline that normally carries refined fuels for propane distribution over the next 30 days
    • FERC is also introducing an alternative dispute resolution process with pipeline companies, shippers, and their representatives to determine how FERC can further alleviate constraints
    • The record propane demand is caused by a combination of heating and crop drying demand coming from the Midwest
  • North Dakota inactive well count is at 2,104, an all-time high
    • High breakevens and a lack of infrastructure in the region continue to stifle production growth
    • These factors have also attributed to a M&A slowdown for acreage in the area

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