April 18, 2019

By April 19, 2019First Look

April 18

Crude Oil:

  • WTI is up 22c to $63.98/Bbl, and Brent is up 24c to $71.86/Bbl
  • US crude inventories fell by 1.4 MMBbl to 455.2 MMBbl last week
    • The draw in stocks came as a surprise to analysts who on average were expecting a fourth consecutive week of builds
    • Crude oil imports to the US fell by 607 MBbl/d to 6 MMBbl/d
      • Imports have averaged 6.5 MMBbl/d over the last four weeks, down by 20.6 percent from the same period last year
  • Libya’s Waha Oil will cut production by 124 MBbl/d from its current level of 300 MBbl/d for the first part of May (Bloomberg)
    • The company will be taking maintenance to replace a pipeline
    • Libya has been under a microscope lately as conflict puts production at risk
  • WTI Midland’s discount to WTI at Cushing widened by $2.10 to -$5.75/Bbl yesterday
    • This is the biggest discount at settlement since Jan. 7
    • The next big relief valve for Permian producers comes in 3Q with Plains’ Cactus 2 pipeline

Natural Gas:

  • Natural gas is down 1.5c to $2.502/MMBtu
  • Cameron LNG reaches final commissioning stage of first liquefaction train (Bloomberg)
    • Sempra recently announced that Cameron LNG has begun pipeline feed gas flow to the first liquefaction train of the liquefaction-export project as it prepares to begin production of liquefied natural gas (LNG) at the facility in Hackberry, LA
    • Phase 1 of the Cameron LNG liquefaction-export project, which includes the first three liquefaction trains, has a projected export capacity of 12 Mtpa of LNG, or approximately 1.7 billion cubic feet per day
  • The Elba Liquefaction facility near Savannah, Georgia is expected to start up by May 1st
    • Volumes at Elba are expected to be minimal while the first train is online, equating to less than 35 MMcf/d of capacity, before bringing the remaining nine trains online
  • Kinder Morgan Gulf Coast Express pipeline is expected to come online in October
    • Gulf Coast Express travels from the Permian to the Texas Gulf Coast
    • Kinder Morgan wouldn’t comment on the rumors that the pipeline might be running ahead of schedule
    • AEGIS notes, the Waha curve improves throughout the summer and into October, implying some possible bullish expectations for the basis location in September, a typically low-demand period subject to price weakness