First Look

August 14, 2019

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  • WTI is down $1.70 to $55.40/Bbl, and Brent is down $1.66 to $59.64/Bbl
  • Oil markets enjoyed a quick pick-me-up on Tuesday after Washington announced cuts to the volume of imports from China it plans to tax in September by more than half
    • US and Chinese negotiators held discussions on Tuesday about the planned tariffs. This follows previous news that Trump was cancelling planned talks in September
    • Trump said he “delayed” the tariffs because of a “very good call with China”
    • WTI rose nearly 4% yesterday on the news
  • Harold Hamm, CEO of Continental Resources, made a call to action to US shale producers while speaking at the EnerCom energy Conference in Denver
    • Mr. Hamm said OPEC and US shale producers should reduce shipments into an oversupplied market
    • He urged producers to curb spending and production, saying “need to row our own boat” and “We need to make sure we don’t oversupply the market”
    • The Continental CEO also made a call on a further decline of onshore drilling rigs, where he said active drilling rigs “haven’t bottomed yet”, noting that “we’re headed for 800 onshore rigs”
      • The US oil and gas rig count stood at 909 last week, according to Baker Hughes
  • The API reported a surprise build of 3.7 MMBbl late on Tuesday for the week ended August 9
    • The oil markets have given much of their gains back this morning after yesterday’s rally
  • EIA petroleum data is due out this morning at 9:30 am CT
    • U.S. Crude Inventories:                  –    2,190 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:             +       615 MBbls
    • U.S. Distillate Inventories:             +       874 MBbls
    • U.S. Refinery Utilization:              –/+     0.00% change
  • Natural gas is up 3.8c to $2.185/MMBtu
  • NextDecade expects to make a final investment decision on its Rio Grande LNG Facility by 4Q2019
    • The total six train project will have an export capacity of 3.6 Bcf/d once fully complete
    • NextDecade is anticipating a 2023 startup date for the first half of its Rio Grande liquefaction facility
  • The Texas heat wave is setting new peak power demand records at 74,181 MW
    • Wholesale power prices have surged as much as 36,000%, jumping above $9,000/MWh
    • Texas will remain stuck in a heat wave for the rest of the month which should help support Houston Ship Channel and Waha basis