First Look

August 13, 2019

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  • WTI is down 45c to $54.48/Bbl, and Brent is down 29c to $58.28/Bbl
  • Plains All American’s Cactus 2 pipeline delivered its first crude commitment to Trafigura Trading LLC (Trafigura)
    • Trafigura received its first delivery of Permian oil from Cactus 2 at the Buckeye Texas Partners terminal in Corpus Christi, Texas
    • This initial receipt by Trafigura represents the first deliveries from about 2.5 MMBbl/d of new pipeline being built headed for the Gulf Coast market
    • The September WTI Midland-WTI contract has improved by about $1/Bbl in the last two weeks as Cactus 2 started filling the pipeline in order to start service
      • The Sept WTI-Midland WTI contract narrowed from -$1.32 to -$0.34 as of Monday over those two weeks
  • US oil majors are steadily ramping up their production onshore (Argus)
    • At a time when large independent drillers look to moderate growth, majors with large acreage plays in the Permian basin are set to drive growth
    • ExxonMobil’s production from the Permian nearly doubled on the year to 274 MBbl/d of BOED in the second quarter, up by 20% from the first quarter
    • The oil major plans to operate 55 rigs in the basin by the end of this year, up from 51 now
    • Chevron’s production in the Permian rose by 55% on the year to 421 MBOE/d in April-June
      • The company says it is confident of meeting its target of 900 MBOE/d by 2023
  • EIA petroleum data is due out this morning at 9:30 am CT
    • U.S. Crude Inventories:                  –    1,571 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:             +       348 MBbls
    • U.S. Distillate Inventories:             +       699 MBbls
    • U.S. Refinery Utilization:              –/+     0.00% change
  • Natural gas is up 2.1c to $2.126/MMBtu
  • An empty LNG tanker has Freeport, TX listed as its destination according to S&P Global
    • While it is unconfirmed, this could be a sign Freeport LNG’s Train 1 is getting ready to ship its first cargo
      • Full commercial operation was expected for this month
    • The entire Freeport facility should be able to export 2.0+ Bcf/d once fully complete
  • The TETCO line remains shut down and flows are expected to remain at zero while the pipeline is under investigation
    • The explosion has not appeared to disrupt production coming from the Appalachian region
    • Basis pricing in the area has come under pressure since the explosion
    • The explosion took place on August 1 and was located in central Kentucky