November 25, 2020

November 25, 2020
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  • WTI is up 34c to $45.25/Bbl, and Brent is up 38c to $48.24/Bbl
  • Oil has extended gains this morning, breaching $45/Bbl as demand optimism bolsters prices
    • Chinese refiners have issued a flurry of tenders for crude to be loaded in January, according to Bloomberg
    • The U.S. American Petroleum Institute reported a build of 3.8 MMBbl in the week ending November 20. The EIA’s numbers will be released at 9:30am
  • The oil refinery run-rate in China was 14% higher than the pre-pandemic level in the week ending November 20, according to Bloomberg
    • China’s gasoline shipments in December are expected to climb 16% month-over-month to 12.46 MMBbls. Diesel shipments are also expected to be around 13.34 MMBbls
    • AEGIS notes that China’s economy has shown more resilience than most of its global counterparts. The country has served as a bright spot in an otherwise gloomy demand outlook, helping to absorb additional barrels of crude to support price
  • EIA weekly data is due at 9:30 am CST
    • U.S. Crude Inventories: +234 MBbls (Avg. Bloomberg surveys)
    • U.S. Gasoline Inventories: +771 MBbls
    • U.S. Distillate Inventories: – 2,233 MBbls
    • U.S. Refinery Utilization: + 0.63% change
  • Natural gas is down 2.3c to $2.752/MMBtu
  • The 2021 natural gas strip has fallen approximately $0.35/MMBtu since the start of November, while the Cal ’22 strip has fallen approximately $0.10/MMBtu during the same time frame
    • This price weakness could be attributed to the spate of warmer-than-normal weather that occurred near the beginning of the month
    • Another contributing factor could also be the surge in Lower 48 natural gas production, which has increased from a low of 86 Bcf on November 11 to a high of 92 bcf on November 23
  • The EIA is expected to report a withdrawal of 25 Bcf for the week ending November 20 (Platts)
    • Analyst estimates ranged from a withdrawal of 39 Bcf to build of 4 Bcf
    • This heating season is forecasted to begin as the third-highest annual peak of US natural gas storage ever

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