October 13, 2020

October 13, 2020
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We’re back! Join AEGIS, Haynes and Boone, and EnerCom Tuesday, October 13 for our next update on current energy issues involving hedging, capital markets, finance, and restructuring in the oil patch. This is a continuation of our Weekly Energy Tracker calls that began in April of this year and will now take place the second Tuesday of each month. Our hosts include Jeff Nichols, Co-chair of Haynes and Boone’s Energy Practice Group, Aaron Vandeford, President, EnerCom, and Matt Marshall, Director, Market Analytics, AEGIS.

Reply to this email if you would like to receive an invitation to the live webcast TODAY at 9 AM.

  • WTI is up 60c to $40.03/Bbl, and Brent is up 53c to $42.25/Bbl
  • The Organization of Petroleum Exporting Countries (OPEC) lowered its supply forecast, as the resurgent pandemic continues to weigh on global demand
    • The coalition, led by Saudi Arabia and Russia, is set to relax the curbs at the start of next year and restore some more supplies, but delegates are growing increasingly concerned about whether markets can absorb additional barrels
    • The organization has reduced its forecast for this quarter by 900 MBbl/d to 27.46 MMBbl/d, and 230 MBbl/d in 2021, to 27.93 MMBbl/d
  • Gulf of Mexico production returns online, as companies begin to assess flooding damage in Hurricane Deltas wake
    • 1,283 MBbl/d (91%) remains offline, representing a 400 MBbl/d increase in Gulf of Mexico supply
    • No major refinery outages have been announced yet, though several were said to have been affected by the storm. Total’s Port Arthur, Tx refinery is running at a reduced rate following a power outage caused by the storm. The 225 MBbl/d refinery is keeping its 75 MBbl/d ADU-2 offline
  • Natural gas is down 7.3c to $2.808/MMBtu
  • Prompt gas prices are down this morning as weather models turned slightly more bearish overnight
    • Natural gas prices hit their highest point since last spring as production in the Gulf remains subdued and LNG feedgas returns
  • The long-delayed Mountain Valley Pipeline (MVP) clears FERC hurdle and targets early 2021 startup
    • The Federal Energy Regulatory Commission decided to partially lift a major stop-work order on the 2 Bcf/d pipeline
    • Reaching a 2021 startup could still hinge on the outcome of a legal challenge by environmental groups that are seeking to stay the pipeline’s stream-crossing, according to Platts
    • “If the court sides with MVP, we believe MVP will enter service by mid-2021,” analysts at Height Securities
    • MVP would move gas from Appalachia to markets in Virginia and North Carolina and elsewhere
  • LNG feedgas demand remains mostly unscathed after Hurricane Delta
    • LNG deliveries increased 1 Bcf on the day to about 7 Bcf/d, according to Bloomberg estimates
    • At the Cameron facility, flows increased about 150 MMcf/d to about 620 MMcf/d

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