October 4, 2019

October 4, 2019
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  • WTI is up 81c to $53.26/Bbl, and Brent is up $1.06 to $58.77/Bbl
  • Oil is set for its largest weekly decline since the middle of July as weak economic data added to fears of a recession (Bloomberg)
    • WTI is down nearly 6% this week as economic data showed American service PMI dropping to the lowest in three years last month and an unemployment gauge registered its weakest point in more than five years
  • The cost to ship oil from the US Gulf Coast to Asia is now double, or $3/Bbl more expensive than the long-run average
    • The typical cost for a 2 MMBbl vessel (VLCC) on the route is usually between $5-6 million. Bloomberg is reporting a oil tanker booked at a lump-sum price above $12 million this week
    • AEGIS will discuss this dynamic more in our Market Summary and how higher shipping cost could effect US exports and prices
  • Natural gas is down 4.9c to $2.280/MMBtu
  • Weather models in the 6-10 day window moved much cooler west of the Mississippi and warmer on the East coast
    • The 11-15 day time period is showing climate norms for a majority of the Lower 48
    • This time of year above-average and below-average temperatures do not have the same effect as in the Summer and Winter months
    • For example, near-term weather models for New York show above-average temperatures, but actual temps will be about 70° F – very nice outside (low demand)
  • The EIA reported a larger than expected build in working gas for last week
    • Underground storage rose by 112 Bcf, the second straight triple-digit build as injection season enters its final month
    • The build was more than the 91 Bcf injection reported during the corresponding week in 2018 as well as the five-year average addition of 83 Bcf, according to the EIA

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