November 4, 2020

November 4, 2020
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  • WTI is up 93c to $38.59/Bbl, and Brent is up $1.02 to $40.73/Bbl
  • Oil prices are trading 2% higher this morning as uncertainty remains over the U.S. election results; EIA data is due at 9:30am
    • Close contests in five key battleground states could delay the declaration of a winner by several days
    • The American Petroleum Institute reported a massive draw of 8.01 MMBbls on Tuesday evening. The EIA is expected to report a small build
  • President Trump falsely claimed victory after the initial results were tallied and even threatened Supreme Court intervention
    • Several battleground states have ballots yet to be tallied but show Trump with a narrow lead. To pull off the upset, Trump will likely need to pull in two of the three “blue wall” states
      • Michigan – Trump holds a narrow lead; still, several democratic leaning counties have yet to be counted. As results come in throughout the day, we will have more color here
      • Pennsylvania – The incumbent has a nearly 700,000 vote lead. An expected 1.4 million absentee ballots have not been counted, and may take several days to get the results
      • Wisconsin – Initial results point to a Biden win
  • EIA weekly data is due at 9:30 am CST
    • S. Crude Inventories: +581 MBbls (Avg. Bloomberg surveys)
    • S. Gasoline Inventories: – 404 MBbls
    • S. Distillate Inventories: – 2,789 MBbls
    • S. Refinery Utilization: – 0.43% change
  • Natural gas is down 2.7c to $3.032/MMBtu
  • Waha spot gas prices in the Permian are at their highest level in over 19 months this week as Permian production slips (Platts)
    • Prices on Tuesday jumped nearly 50c to $2.42/MMBtu as Permian production slipped below 10 Bcf/d for the second time in the past 10 days, according to Platts data
    • The turnaround in Waha cash began with an end to recent maintenance work on El Paso Natural Gas and was also buoyed by unseasonably cold weather
  • Equitrans Midstream affirmed investors that the Mountain Valley Pipeline (MVP) should still be able to start full operations in the second half of 2021, despite legal setbacks (Pittsburgh Business Times)
    • The company increased the estimated cost of the 2 Bcf/d project to between $5.8 billion and $6 billion
    • The project will connect Appalachian gas to Mid-Atlantic demand centers and is almost complete, but permit challenges and litigation have held up the final stages
    • Height Securities analysts estimate a late 2021 in-service date. “However, successful legal challenges by project opponents could delay in-service until late 2021,” the analysts said
    • AEGIS notes that MVP will be an important project for Appalachian producers trying to dispose of gas in times of lower local demand as current production is already at records

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