January 10, 2019

By January 11, 2019First Look

January 10

Crude Oil:

  • WTI is down 42c to $51.94/Bbl, and Brent is down 34c to $61.10/Bbl
  • WTI moved above the $50 mark yesterday thanks to a nearly five percent rally
    • The momentum was carried across the curve with Cal 21 and Cal 22 up over $1.64 and $1.31 respectively
    • Trade war optimism and lower OPEC and Canadian production have fueled the nearly $10 surge in price over the past two weeks
  • Saudi Aramco plans to issue its first ever international bond in an effort to finance the acquisition of petrochemical company Sabic (Bloomberg)
    • The Saudis also published the first audit of its oil reserves, saying reserves total 268.5 billion, slightly higher than the 266.3 billion the government previously published
  • US crude inventories fell by 1.7 MMBbl to total 439.7 MMBbl last week, according to the EIA
    • Stocks at Cushing, Oklahoma, last week rose by 330 MBbl to total 42.3 MMBbl
      • This was the seventh consecutive build at Cushing

Natural Gas:

  • Natural gas is up 7.8c to $3.062/MMBtu
  • Weather models show a warmer East and South in the 6-10 day outlook with a colder Midwest to Texas in the 11-15 day
    • Models are gradually edging into a colder transition
    • Overnight demand added 1.5 HDD’s
    • Northeast basis are sharply higher in the spot market as Canadian air dips down into the Mid-Atlantic
  • Analysts surveyed by Platts are anticipating the EIA to report a 84 Bcf withdrawal from natural gas storage for the week ended January 4
    • The Platts’ survey ranged from -69 Bcf to -95 Bcf
    • A withdrawal of 84 Bcf would decrease stocks to 2.621 Tcf
  • WhiteWater Midstream has proposed a 500 MMcf/d natural gas pipeline, Steady Eddy Pipeline, that will transport Permian Basin natural gas (AP)
    • The new interstate pipeline would run from Eddy County, New Mexico to delivery points in Northern Culberson County, Texas
    • WhiteWater Midstream is holding a binding Open Season to solicit commitments for firm natural gas transportation until February 15, 2019

NOAA Gas-weighted Temperatures and Degree Days

  • More demand gains on Jan. 23 and Jan 24. Gas prices responding to the added forecasted demand this morning.