October 23, 2020

October 23, 2020
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  • WTI is up 13c to $40.77/Bbl, and Brent is up 15c to $42.61/Bbl.
  • President Trump seized on Former Vice President Biden’s remark about transitioning from the oil industry during the final presidential debate
    • In one of his starkest comments regarding the oil industry yet, former Vice President Biden said, “I would transition from the oil industry, yes”, when pressed by President Trump
    • The timing of this comment is important as Biden is still vying for voters in the 3rd and 4th largest swing-states, Pennsylvania, and Ohio, who produce much of the country’s natural gas
  • President Putin said Russia is open to cutting oil output further – (Bloomberg)
    • The OPEC+ production cuts are set to expire in January. Vladimir Putin said that he will not rule out delaying the output hike as coronavirus cases continue to mount
    • Russia’s compliance with the cuts has been 97%, a promising sign given the comments during the price war with Saudi Arabia earlier in the year regarding leaving the cartel
  • Shale oil output slated to drop by six percent in 2021 (Argus)
    • The result of low prices and global oversupply will contribute to the fall in supply
    • Rystad announced that they do not expect companies to resume significant capital spending on exploration and drilling until at least 2022
    • The forecast shows U.S. oil output will reach 13.6 MMBbl/d by 2030
  • Natural gas is down 3.1c to $2.976/MMBtu
  • Although gas prices are lower today, the Cal 2021 price is just 7c off its highest-ever settle Wednesday
  • Near-term prices are weighing a warming 6-10 day forecast period against potential cold in the Midwest in the first week of November
  • Waha gas spot price settled at just $0.07/MMBtu yesterday for Friday delivery
    • Pipeline maintenance, mild weather, and subdued power-generation demand in Texas has hurt gas prices. They had been negative on Monday and last Friday.
    • Meanwhile, Cal 2021 Waha gas is priced at just a -$0.22 discount to Henry Hub
  • EQT curtailed production for economic reasons in May-July and September, to delay production until prices were higher, the company disclosed in its 3Q2020 earnings call yesterday
    • All remaining production was returned during October
    • EQT was also reported to be pursuing a takeover of CNX Resources, sending the latter’s stock value up over 11% yesterday. EQT’s rose over 6%
  • Natural gas inventories rose by a seasonally small 49 Bcf for the week ended October 16
    • The build, reported by the EIA yesterday, was the smallest for this time of year in the last five years
    • Inventories usually rise until early November, and this year’s trajectory is aimed at a new five-year high peak, near 4,100 Bcf

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