September 4, 2019

September 4, 2019
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  • WTI is up $1.52c to $55.46/Bbl, and Brent is up $1.42 to $59.68/Bbl
  • Oil prices are higher this morning, offsetting yesterday’s drop
    • Economic worries loom, but positive news from the Chinese service sector has helped buoy crude today
  • Enbridge will soon start flows on the Canadian side of its 760 MBbl/d Line 3 crude oil pipeline replacement project
    • The new 665-mile line will connect to the existing Line 3 at the Canada-US border
    • The existing 760 Mbbl/d line has been running at about half capacity because of integrity concerns
      • The entire Line 3 system moves Canadian crude oil from Edmonton, Alberta, to Superior, Wisconsin
  • Concho Resources will sell some a portion of its Permian basin assets in New Mexico to Spur Energy Partners for $925 million
    • The sale includes about 100k gross acres with about 25 MBoe/d of production
    • Concho will use the sale proceeds to pay down debt and initiate a $1.5 billion share repurchase program
    • AEGIS notes that many companies are facing mounting debt amid a soft price environment – leading many to mull divestitures as a means of paying down debt
  • Natural gas is up 3.0c to $2.388/MMBtu
  • Freeport LNG shipped its first commissioning cargo from its Train 1 facility
    • Commercial operations will begin later in the month
    • Train 2 has a targeted in-service date of January 2020; Train 3 is expected to come online in May of 2020
  • The Dominion South Oct ’19 contract has taken a nosedive, falling around $0.20 since mid-August
    • While the Jan ’20 tenor is near its strongest levels in the last five years
    • There are several reasons that could be attributing to the weakness such as strong Appalachian production and or weaker seasonal demand
      • More commentary to come on Appalachia prices when AEGIS releases its Infrastructure Report on Friday

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