September 27, 2019

September 27, 2019
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  • Saudi Arabia has imposed a partial cease-fire in Yemen, suggesting hope of easing Middle East tensions (Bloomberg)
    • The cease-fire was initiated by Houthi forces, the same group who took credit for the drone strikes on Saudi Arabia earlier this year
  • Crude oil shipping rates from Saudi Arabia to China have jumped nearly 20% following President Trump’s sanctions on the world’s largest freighter, China Ocean Shipping Company (COSCO) (Reuters)
    • Shipping rates are at the same levels they were immediately following the Saudi drone strikes
    • Higher costs and logistical challenges could put further strains on demand growth from China and abroad
  • The EIA reported a 102-Bcf storage build, which was outside the estimated range
    • Total storage now stands slightly above 3.2 Tcf and will likely finish around 3.77 Tcf
    • By many forecasts, next week’s storage could be another three-digit build
  • U.S. natural gas production is nearly 1 Bcf/d more than the previous week (PointLogic)
    • The opening of the Gulf Coast Express, along with several large Permian crude pipelines, may have supported gas production growth and taken the total above 93 Bcf/d
    • Since storage draws are not expected to begin for another month or so, gas prices could face continued bearish pressure
    • Prompt month gas has had eight straight days of declines

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