September 30, 2019

September 30, 2019
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  • WTI is down 85c to $55.06/Bbl, and Brent is down $1.02 to $60.89/Bbl
  • The future Saudi King warned that a war between his country and Iran would lead to a “total collapse of the global economy” (60 minutes)
    • Crown Prince Mohammad Bin Salman of Saudi Arabia or MBS as he’s known, admitted that the attacks on Saudi from Iran were an act of war, but made it clear that he want’s a peaceful solution
    • The crown prince also said “Oil prices would jump to unimaginably high number that we haven’t seen in our lifetimes,” if any war between the two countries were to happen
    • MBS believes the attacks from Iran were motivated by “stupidity” and in his opinion “There is no strategic goal. Only a fool would attack 5% of global supplies.”
  • US oil-directed rigs fell by six to 713 last week, continuing the steady decline (Baker Hughes)
    • By state, Texas lost the most at five
  • China’s COSCO Shipping Energy Transportation Co. have had US sanctions applied to them for hauling Iranian oil (Bloomberg)
    • Crude buyers are trying to find replacements for vessels owned by units of COSCO, according to Bloomberg
    • Supertanker rates have climbed to the highest level this year after US sanctioned COSCO vessels
      • WorldScale points, which is a measure of crude oil vessel shipping cost, rose to 80 WS for the route from the Middle East to China
  • Natural gas is down 6.7c to $2.337/MMBtu
  • U.S. natural gas production topped 94 Bcf/d for the first time on Friday (PointLogic)
    • Much of the production increases, some +600 MMcf/d, came from the Northeast
  • U.S. LNG feed gas demand has rebounded to 6.7 Bcf/d
    • However, Dominion’s Cove Point is still under maintenance and usually accounts for around +700 MMcf/d
    • Most of the feed gas demand growth is coming from Freeport’s facility
      • Freeport’s Train 1 is supposed to begin commercial activity any day know
  • The CFTC reported that managed money positions in NYMEX natural gas fell by 15k lots to -76K for the week ending September 24
    • Prompt month natural gas is now at nine straight days of declines

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