October 7, 2020

October 7, 2020
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  • WTI is down 67c to $40.00/Bbl, and Brent is up 4205c to $42.05/Bbl.
  • WTI has pared gains this morning, after rallying by $1.45/bbl yesterday
    • After news that talks for the fourth COVID-19 stimulus package fell through, the prompt-month contract saw an increase in selling pressure
    • The American Petroleum Institute (API) reported a build in U.S. crude inventories of 951 MBbls, which added further to the selling pressure
    • Hurricane Delta has been upgraded to a Category 4 and is expected to make landfall along the coast of Mexico today. The Hurricane is forecast to reach the United States by Friday
  • Azerbaijan adhered to oil-cut commitments in September, according to the ministry
    • The country produced 585 MBbl/d of crude, cutting by more than promised, also producing 68.5 MBbl/d of condensate
  • EIA weekly data is due at 9:30 AM CST
    • U.S. Crude Inventories: – 880 MBbls (Avg. Bloomberg surveys)
    • U.S. Gasoline Inventories: – 555 MBbls
    • U.S. Distillate Inventories: – 1,274 MBbls
    • U.S. Refinery Utilization: – 0.20% change
  • Natural gas is up 7.5c to $2.595/MMBtu.
  • November gas prices rose Wednesday morning with help from cooler weather pattern changes overnight
    • The 11-14 day model runs show cooler temperature changes in the Midwest and Southeast United States (CWG)
  • Waha hub basis for November has plunged nearly 30c since October 1 after several months of strong prices
    • The cash market for the hub is feeling more of the pressure, with regional pipeline maintenance being the primary driver of the price collapse
    • Unplanned maintenance on El Paso Natural gas (EPNG) pipeline system sent outright (not basis) cash prices negative on October 5
    • Spot (cash) Waha prices have slid about 59c since unplanned maintenance started last week
  • The Wahalajara natural gas pipeline system is now fully operational after developer Fermaca started operations of its southernmost segment (Platts)
    • The system transports gas from the Permian basin to southern Mexico through six states
    • Fermaca announced on Oct. 2 that it had started operations of the Villa de Reyes-Aguascalientes-Guadalajara (VAG) segment
    • The new VAG system could add an additional 400 MMcf/d to U.S. to Mexico exports, which are already near all-time record highs

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