October 22, 2019

October 22, 2019
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  • WTI is up 52c to $53.83/Bbl, and Brent is up 48c to $59.44/Bbl
  • Western Canadian Select (WCS) crude at Houston narrowed last week from the widest discount to the CMA Nymex since 2017
    • Higher refinery demand and a narrower rail arbitrage contributed to the narrowing, according to Argus
    • The heavy sour WCS Houston settled at a $5.75/Bbl discount to the CMA Nymex basis on October 18, shrinking by $2.05/Bbl from the week ended October 11
    • The large discount for WCS Houston was mostly driven by refinery maintenance
  • Phillips 66 has filed a tariff for its 900 MBbl/d Gray Oak crude line from the Permian basin in west Texas to the US Gulf Coast
    • The spot tariff for moving crude from the Permian to various destinations near Corpus Christi is $4.75/Bbl
    • The tariff goes into effect on October 25 and applies to those with “accelerated commissioning service”
    • Gray Oak will not start service until November 10, according to the tariff filing, and will join two other new lines that move Permian crude to the Gulf Coast
  • Halliburton said it expects a further acceleration in drilling and well completion activity in the final months of the year after revenue in North America fell by 21% in the third quarter
    • Chief executive Jeff Miller said customer spending is expected to drop in the fourth quarter as most producers concentrated their investments in the first half of the year
    • The company sees more international revenue and margin growth opportunities as the business outlook for North America remains challenging (Halliburton 3Q earnings call)
  • Natural gas is up 1.0c to $2.248/MMBtu
  • Cheniere is pushing back the service date of its Sabine Pass Train 6 to 1H2023
    • The delay comes as the company believes there will be a greater need for this train in 2023 as the global spot market for LNG continues to develop
    • Cheniere’s decision suggests that the need for additional LNG supply will not be necessary until later in 2023, unless firm off-take agreements can be signed
  • The Bakken is looking to add over 400 MMcf/d of gas processing before the end of 4Q2019 (Platts)
    • The Bakken flares approximately 19% of natural gas produced due to a lack of takeaway capacity for associated gas production
    • Kinder Morgan’s 150 MMcf/d Roosevelt processing plant comes online at the start of November, leading the upstart of new processing capacity

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