November 25, 2019

November 25, 2019
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  • WTI is down 8c to $57.69/Bbl, and Brent is down 5c to $63.34/Bbl
  • Oil is steady after China made a concession on intellectual property rights that could help the current impasse between the U.S. and China’s trade war (Bloomberg)
    • China said over the weekend it will raise penalties on violation of intellectual property (IP) rights
    • IP rights have been a sticking point in talks with the U.S.
  • Phillips 66 has started initial service on its 900 Mbbl/d Gray Oak pipeline from the Permian to Corpus Christi, Texas
    • Full service on the line will commence in the first quarter 2020, according to the company
    • P66 is proposing to lower some tariffs on Gray Oak as competition in the region has already pushed down tariffs from other midstream companies
    • The spot tariff for transporting crude from points in west Texas to locations in and around Corpus Christi, would be lowered to $3.90/Bbl, from $4.75/Bbl (Argus)
  • The US oil-directed rig count fell by three to 671 in their fifth straight week of declines (Baker Hughes)
    • Permian rigs fell by two and rigs in Alaska fell by three
  • Natural gas is down 13.6c to $2.529/MMBtu
  • Managed money short positions increased by 41,816 contracts to total 243,004, a 428% increase compared to last year
    • Managed money long positions fell by 8,831 contracts to total 106,811 contracts, this is only 2,000 contracts above the 52-week low
    • The prompt month natural gas contact has given up all of its gains from last week’s rally, prior to market open, as production hit a new daily record (PointLogic) over the weekend and the December outlook continues to remain muddied
  • A global gas glut has some analysts suggesting that LNG exporters in the United States may need to curtail exports (Business Times)
    • Gas for near-term delivery in Asia and Denmark has lost half its value over the last 14 months, prices could further erode amidst a mild winter
    • International LNG exporters require customers to sign contracts with take-or-pay clauses, whereas customers for American LNG can opt out of delivery with 30 to 60 days of prior notice
    • The difference in contract terms would help set up the United States as the global swing supplier

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