October 7, 2019

October 7, 2019
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  • WTI is up 66c to $53.47/Bbl, and Brent is up 60c to $58.97/Bbl
  • Oil prices are higher as markets look ahead to the resumption of US-China trade talks this week
    • Futures lost nearly 6% last week as the ongoing trade war continues to cause demand growth worries
    • China and the US will meet Thursday
  • Enterprise Products Partners has secured long-term agreements on a proposed 450 MBbl/d pipeline from the Permian to Houston area
    • The proposed line would be an expansion of the company’s Midland-to-Echo system which already includes a 620 MBbl/d crude line from the Permian to Gulf coast
    • The line is expected to be in service in the first half of 2021, according to Enterprise
      • Enterprise said it would convert the Seminole Red pipeline back to NGL service in the second half of 2021. Seminole Red was converted to crude service in April amid a wider WTI Midland-Cushing spread
  • The US oil-directed rig count fell by three to 710 last week, according to Baker Hughes
    • This was the seventh consecutive loss
    • The law firm Haynes Boone conducted a survey of 221 respondents that includes oil and gas producers, service companies, financial institutions and private equity firms
      • The survey showed for the first time since 2016 the majority expect their borrowing bases to decrease this fall
  • Natural gas is down 4.7c to $2.305/MMBtu
  • Supply is down slightly over 1.5 Bcf from Friday’s numbers (PointLogic)
    • The biggest drop came from the Appalachian region which is down 1 Bcf
    • The Columbia TCO pipeline saw flows reduced by 0.7 Bcf/d
  • Natural gas short positions grew almost 25,000 contracts to 232,736 according to the CFTC
    • Long positions declined by 21,000 contracts to 112,405, a 52-week low
  • Kinder Morgan will pay the city of Kyle $2.7 million and agree to pump only natural gas through its Permian Highway Pipeline
    • The Central Texas city has been vocal critics of the pipeline since it first became public in late 2018
    • Permian Highway Pipeline (PHP) is designed to transport natural gas from the Permian basin to the Texas Gulf Coast
      • The pipeline’s route takes it through sensitive environmental areas in the Texas Hill country where it has faced opposition
      • PHP is due in service late 2020 and will provide relief to Waha area basis

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