- WTI is trading down near $70/Bbl with a broader selloff in equities and a rise in the dollar
- Equity futures plunged nearly 2% amid concerns over property developer China Evergrande Group (WSJ)
- The U.S. dollar gained ahead of a Federal Reserve meeting that’s expected to see stimulus scaled back (Bloomberg)
- Traders increasingly believe China’s government will let Evergrande fail (WSJ)
- Evergrande’s debt burden is the largest for and publicly traded real estate management or development company in the world
- The crude market wouldn’t be able to absorb widespread replacement of pricy natural gas with oil in the power and industrial sectors in case of a cold winter, Goldman Sachs analysts said in a note Sunday (Bloomberg, GS)
- The potential for gas-to-oil substitution could reach as much as 1.35 MMBbl/d in power and 0.6 MMBbl/d in the industry in Asia and Europe
- “Such a large demand boost would prove too large for the oil market to absorb, leading to a spike in prices to in turn achieve oil demand destruction.”