September 9, 2019

September 9, 2019
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  • WTI is up 47c to $56.99/Bbl, and Brent is up 33c to $61.87/Bbl
  • Saudi Arabia has a new energy minister, Prince Abdulaziz bin Salman, son of Saudi King Salman and member of the Saudi delegation to OPEC
    • Prince Abdulaziz said the current Saudi policy would not change and the current supply cut deal with OPEC+ would survive
    • Oil prices are up this morning following the new energy minister’s plan to stay the course
  • OPEC’s Joint Ministerial Monitoring Committee (JMMC) may discuss new metrics for the current supply cut deal when it meets in Abu-Dhabi later this week, according to Russian news agency TASS
    • OPEC, plus its allies (OPEC+), have been using certain metrics for the current supply deal, such as the trailing 5-year average oil stocks in the developed countries (OECD)
    • AEGIS notes that during OPEC’s last official meeting in Vienna, the now previous energy minister of Saudi Arabia Khalid al-Falih, discussed changing the trailing 5-year oil inventory metric to 2010-2014 inventory levels
      • Moving the goalpost on inventories would be a dramatic shift in policy and would require OPEC+ to cut much deeper
  • The US oil-directed drilling rig count fell by four to 738 last week, according to Baker Hughes
    • Oil rigs have fallen by 147 so far this year
    • Active rigs have been on the decline as many producers focus on cutting spending
  • Natural gas is up 3.2c to $2.528/MMBtu
  • Workers have returned to Elba’s liquefaction facility after evacuating from Hurricane Dorian
    • The facility appears to be undamaged according to a company spokeswoman
    • Feed gas flows currently stand around 5.6 Bcf/d, according to Platts
  • Weather models continue to forecast unseasonably warm temperatures for the next 15 to 20 days
    • The heat will be concentrated throughout the country, except on the West Coast
    • Unseasonably warm weather has helped gas prices rise close to 21% since the beginning of August

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