September 25, 2019

September 25, 2019
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  • WTI is down 94c to $56.35/Bbl, and Brent is down 105c to $62.05/Bbl
  • Oil prices are down this morning as Saudi Arabia has restored its oil production capacity to 11.3 MMBbl/d, a faster recovery than expected (Reuters)
    • Sources told Reuters that output from the Khurais field is now at 1.3 MMBbl/d and the Abqaiq plant is currently at about 4.9 MMBbl/d
    • Saudi Arabia’s oil infrastructure was attacked on September 14 that knocked out almost half of its oil production
  • President Trump addressed the UN on Tuesday, criticizing China’s trade practices and tampered down expectations of a near-term US/China trade deal
    • Trump said “Hopefully we can reach an agreement that is beneficial for both countries, but I will not accept a bad deal that is not beneficial for the American people”
    • AEGIS notes that the ongoing US/China trade war has continued to weigh on global GDP growth and oil demand growth
      • The combination of forecasted growing global oil supplies and lackluster growth in demand has helped kept WTI crude oil from breaking out above $60/Bbl for some time now
  • EIA petroleum data is due out this morning at 9:30 am CT
    • U.S. Crude Inventories:                  –       276 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:             –       493  MBbls
    • U.S. Distillate Inventories:             –       602  MBbls
    • U.S. Refinery Utilization:               –     0.60% change
  • Natural gas is down 1.8c to $2.485/MMBtu
  • Kinder Morgan’s (KMI) 2 Bcf/d Gulf Coast Express will be placed into full commercial service today
    • Next in line will be KMI’s 2 Bcf/d Permian Highway Pipeline, which is targeted to begin service in 3Q2020
    • The company is also hinting at a third and fourth Permian takeaway project, however those appear to be a little more uncertain
  • Summer weather is forecasted to start fading away in both the 6-to-10 day and 11-to-15-day weather model outlooks
    • However, warmer temperatures should remain in the Southeastern portions of the United States
    • This is a bullish sign for natural gas, as lingering heat into the end of October and beginning of November would begin to cut into winter heating demand

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