September 18, 2019

September 18, 2019
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  • WTI is down $1.01 to $58.33/Bbl, and Brent is down 70c to $63.85/Bbl
  • Crude oil price is down this morning for the second straight day, but still higher than last Friday’s settle
    • Both Brent and WTI are up about $4/Bbl since attacks on Saudi infrastructure occurred
  • Saudi Arabia has restored half of the 5.7 MMBbl/d of crude production that was knocked out after drone/missile attacks targeted key infrastructure, according to the country’s oil minister
    • Production could rise to 11 mmb/d by end of Oct and 12 mmb/d by end of Nov, but this seems to be productive capacity, not actual production
    • Saudi had previously warned customers that some export cargoes would be delayed, and there could be substitutions with different crude grades (Bloomberg)
    • The immediate plan is apparently to reduce domestic consumption, draw from inventories, and increase production elsewhere to be certain that net exportable crude oil is increased
  • The attacks on Saudi facilities are believed to have come from Southwest Iran, a US official told Reuters
    • US officials said the attacks involved cruise missiles and drones, an indication of a higher degree of sophistication than initially thought (Reuters)
  • The Trump administration plans to revoke California’s right to set stricter air pollution standards for cars and light trucks
    • The move is likely to set a massive legal battle between California and the US federal government (Washington Post)
    • AEGIS notes that California plays a big role in how automobile manufactures make vehicles. California’s market is so large that many car makes design emission standards to comply with the progressive state’s rules and this in turn can trickle down to the rest of the US
  • Natural gas is up 2.4c to $2.692/MMBtu
  • The 2.6 Bcf/d Sur de Texas (SDT) pipeline has officially begun commercial operations
    • PointLogic notes that roughly 550 MMcf/d began flowing across the border into Mexico starting on Tuesday
    • Flows between the U.S. and Mexico could increase quickly, in the near term, as Kinder Morgan’s Gulf Coast Express is set to begin commercial operations on September 20
  • Cameron LNG is still producing and loading LNG from its Train 1 despite last Friday’s force majeure, according to a spokeswoman for the company
    • The company is planning on completing its second train in 4Q2019
    • Total U.S. feed gas flows are maintaining around 6.6 Bcf/d, according to Platts
  • EOG Resources has signed a long-term gas supply agreement with Cheniere Energy beginning in 2020
    • The deal is subject to a positive Final Investment Decision for Cheniere’s Corpus Christi Midscale Liquefaction project
    • The midscale project is planned to include seven trains with a total export capacity of approximately 1.5 Bcf/d

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