December 3, 2018

By December 4, 2018First Look

December 3

Crude Oil:

  • WTI is up $2.33 to $53.26/Bbl, and Brent is up $2.47 to $61.93/Bbl
  • Oil is up this morning on the backs of Saudi and Russia cooperation and oil production cuts ordered by Canada’s Alberta providence
    • Over the weekend both leaders from Saudi Arabia and Russia agreed to extend a deal into 2019 to manage the markets (Bloomberg)
      • This will likely lay the ground work for a deal come December 6 in Vienna
    • Alberta’s government decision to curtail production in its providence will reduce production by 325 MBbl/d
      • Canadian producers have been experiencing historically low crude differentials as production has outpaced takeaway capacity
  • Qatar’s energy minister said his country would leave OPEC in January and not be committing to any agreements by the group
    • Qatar accounts for less than two percent of OPEC’s output
  • Oman’s Energy Minister al-Rumhy said over the weekend that he believed there was a consensus among OPEC producers to cut (Reuters)
    • He said his country has “always been a champion of cutting”

Natural Gas:

  • Natural gas is down 31.1c to $4.301/MMBtu
    • Weather models show a consistent cold patter for the next nine days with a warmer period starting on Dec 12
      • Some division at day 15 with different routes into later December
    • After months of delays, the Trump administration announced on Friday that it had approved seismic testing for oil and natural gas reserves along the US East Coast (Platts)
      • The administration tentatively plans to hold two Atlantic lease sales, one for drilling rights in the South Atlantic and one for rights in the Mid-Atlantic, in 2020
    • Russia’s Gazprom Neft is nearing the start of operations at the Kaliningrad floating storage and regasification unit terminal, which will be the country’s first LNG import facility (Platts)
      • The region has a population of about one million bordering Poland and Lithuania, but is not connected by land to greater Russia making the terminal very advantageous to supply the region with natural gas
    • Natural gas-directed drilling rigs decreased by five to 189, according to Baker Hughes
      • Marcellus decreased by two to 56, Utica remained at 17, and Haynesville increased by one to 52