September 24, 2020

September 24, 2020
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  • WTI is down 34c to $39.59/Bbl, and Brent is down 32c to $41.45/Bbl.
  • West Texas Intermediate traded flat near $40/Bbl Thursday morning despite warnings on the U.S. economy and global crude demand
    • Federal Reserve officials said more fiscal stimulus is critical to sustaining the U.S. recovery
    • Commodity trader Mercuria Energy Group said global oil markets won’t be able to absorb an OPEC+ production increase as demand is weaker than expected
  • A crude inventory withdrawal wasn’t enough to keep prices buoyed yesterday as oil prices dipped into the close Wednesday
    • The EIA reported a 1.6 MMBbl draw in crude stocks, as well as a sizable 4.02 MMBbl decline in gasoline inventories
    • U.S. distillate stockpiles also decline, a good sign as diesel inventories are at very high levels
  • Oil executives are airing concerns about a possible Democratic president Joe Biden, worried about a hit to their bottom lines (Argus)
    • Biden has promised to “ban” new oil and gas permitting on federally owned land, reinstate restrictions on methane emissions, and set ambitious fuel-economy targets for cars and trucks
    • “A Biden administration would absolutely kill our industry, “ one unnamed executive at an oil and gas production company said, according to Argus
    • AEGIS notes that you can check out our election tracker here, to keep up with the main topics from the Biden platform pertaining to oil and gas impacts
  • Natural gas is up 10.3c to $2.228/MMBtu.
  • The EIA is expected to report a 77-Bcf injection for the week ending September 18, which would be less than the 97-Bcf build in the corresponding week of last year
    • Analysts estimates ranged from a build of 65 Bcf to 85 Bcf
    • A build within this range would bring total stocks near 3.691 Tcf and the surplus to the five-year average near 418 Bcf
    • The current end-of-season storage number being offered on ICE is at 3,975 Bcf, a decrease from 4,050 Bcf last week
  • Colorado lawmakers adopt new rules to reduce emissions from oil and gas operations
    • Written under authority from the 2019 bill SB 181, the new rules will require high-frequency monitoring for gas leaks starting when construction on a well begins and continuing through the first six months of production
    • The rule also prohibits natural gas venting during the early period of well completion
    • An additional measure to require 2,000 ft setbacks from homes, hospitals, and other sensitive areas remains under further review
  • Dallas Federal Reserve released its 3Q2020 energy survey results showing oil and gas sector contraction ongoing
    • The business activity index—the survey’s broadest measure of conditions facing Eleventh District energy firms—remained in negative territory but improved from -66.1 in the second quarter to -6.6 in the third quarter, suggesting that the pace of the contraction has significantly lessened
    • According to exploration and production (E&P) executives, the oil production index rose from -62.6 in the second quarter to -15.4 in the third. The natural gas production index increased 38 points to -10.1

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