September 11, 2020

September 11, 2020
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  • WTI is down 49c to $36.81/Bbl, and Brent is down 55c to $39.51/Bbl
  • Oil futures are set for their first back-to-back weekly loss since April’s price rout, driven by a patchy demand recovery and risk off trading (Bloomberg)
    • U.S. crude oil inventories rose last week according to the EIA’s Wednesday’s data release
    • Some market players are now considering storing crude a sea again and oil’s curve structure has steepened into deeper contango with recent price weakness
  • On Thursday, Brent for December settled at its biggest discount to year-ahead futures since May
    • This structure, known as contango, indicates a weaker physical market and concerns about oversupply
    • In recent days, several supertankers have been chartered that could be used for floating storage or for transport, according to Bloomberg and shipbrokers and fixtures
  • U.S. crude stocks rose by 2 MMBbl to 500.4 MMBbl last week, delivering a surprise to analysts
    • Many were expecting a withdrawal in stocks, but there was still some noise in the data due to Hurricane Laura
    • Stocks at Cushing, Oklahoma, hub, rose by 1.8 MMBbl to about 54.4 MMBbl; the highest level since May
    • U.S. crude imports, which had declined because of the storms, increased sharply last week
  • Natural gas is down 2.3c to $2.300/MMBtu
  • The EIA reported a 70-Bcf build for the week ending September 4, this was slightly larger than the 64-Bcf build analysts expected
    • Total stocks now stand at 3.525 Tcf, which is 409 Bcf above the five-year average
    • ICE has the end-of-season storage number being offered at 4.025 Tcf following the latest injection report
  • BP, Shell urges Texas Railroad Commission to end gas flaring in the state
    • The commission is considering requiring operators to disclose more data when they apply for flaring permits and issuing them for shorter periods
    • The two companies released a joint statement saying, “We encourage the Railroad Commission of Texas to support an ambition of zero routine flaring in Texas.”
  • FERC grants Freeport LNG’s request to extend the completion deadline for the sites fourth train
    • The updated deadline will be in May 2026, a three-year extension from the original date of May 2023
    • The company has said that it does not expect to make a final investment decision this year, citing the COVID-19 market disruptions this year

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