October 30, 2019

October 30, 2019
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  • Yesterday’s survey results are posted at the bottom of the First Look
  • WTI is down 22c to $55.32/Bbl, and Brent is flat to $61.59/Bbl
  • China has pushed back on President Trump’s request for Beijing to commit to big purchases of American farm products
    • It has become a major sticking point to end the China-US trade war, according to people briefed on current negotiations (Reuters)
    • China wants the ability to buy product based on market conditions while Trump has announced publicly that China could buy as much as $50 billion of US farm products
    • On Tuesday, a US administration said the two sides might not agree to a “Phase One” deal by mid-November
  • EIA weekly data is due at 9:30 AM CST
    • U.S. Crude Inventories:                  –         104 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:             –      2,040 MBbls
    • U.S. Distillate Inventories:             –     2,277 MBbls
    • U.S. Refinery Utilization:               +       0.72% change
  • Natural gas is up 4.5c to $2.684/MMBtu
  • Equity markets are rewarding natural gas producers who proved that they have reduced drilling activity, as well as plan to continue to keep growth rates subdued in the future (WSJ)
    • Appalachian gas producers have seen shares jump as much as 16% on news of using cash to pay down debt, as opposed to aggressively growing drilling programs
    • Many other upstream producers could maintain this slowdown in activity if markets continue to reward these moves, especially if commodity prices remain depressed
  • Midstream provider, OneOK, is calling for over 20% earnings growth in 2020, according to their CEO
    • Earnings growth is anticipated to be driven by natural gas and NGL infrastructure, with projects aimed at reducing flaring in the Williston Basin
    • Roughly 60% of the company’s capital spending on growth projects, for 2019, were geared towards NGLs
  • The December contract is now prompt and is maintaining some momentum from the previous two days of trading
    • The November ‘19 contract rallied approximately $0.29/MMBtu before rolling off, the December ’19 is up 6c before market open

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