November 4, 2019

November 4, 2019
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  • WTI is up 58c to $56.78/Bbl, and Brent is up 69c to $62.38/Bbl
  • Hedge funds reversed the trend of bets on falling crude oil for the first time in six weeks (CFTC)
    • Outright short positions were reduced by 12k contracts to 112,297
    • The net position, longs plus shorts, is still net-long about 100k contracts – near 2019 lows
  • The oil-directed rig count fell by five last week to 691, according to Baker Hughes
    • By state,  Oklahoma lost the most total rigs, at three
    • The total US land rig count, inclusive of oil and gas,  stands at 822 active rigs
    • Continental Resources CEO Harold Hamm said the US need 800 land rigs to balance oil supply and demand (Argus)
    • Drilling activity is expected to slow further as some producers further reduce spending plans – a trend seen so far in upstream 3Q earnings calls
  • The Keystone pipeline disruption continues to weigh on Western Canadian Select (WCS) oil prices
    • TC Energy’s Keystone pipeline transports crude from Alberta to the Midwest and the Gulf Coast
    • The fall in WCS crude prices has been focused on the front of the curve
      • This suggest the market sees little impact past a month
  • Natural gas is up 9.6c to $2.810/MMBtu
  • Cheniere is moving up the in-service date of their Corpus Christi Trian 3 to 1H2021, as opposed to 2H2021
    • The Sabine Pass Train 6 is also having its in-service date moved up to 1H2023
    • A Final Investment Decision for the Corpus Christi Stage 3 Midscale expansion will be made in 1H2020
    • LNG feed gas demand reached a new high of 7.7 Bcf/d
  • Natural gas long positions increased by 12,085 contracts to 118,785 contracts total, according to the CFTC
    • Short positions fell 21,951 contracts to 298,878 contracts total
    • The December contract saw its biggest weekly price spike since January 2019, rising approximately 10%
  • Weather forecasts continue to show colder than normal temperatures through the middle of November
    • Gas-Weighted Heating Degree Days for November are forecasted to come in at 639, 1-degree day away from breaking into the top ten coldest Novembers of all time according to the Commodity Weather Group
    • The Cold weather will be concentrated in the Midwest and East Coast through the 11-to-15-day forecast

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