January 8, 2019

By January 9, 2019First Look

January 8

Crude Oil:

  • WTI is up 84c to $49.36/Bbl, and Brent is up 98c to $58.31/Bbl
  • Oil is up again this morning for the sixth consecutive trading day with hopes of a US/China trade deal and market tightening due to OPEC cuts
  • Western Canadian Select (WCS) at Hardisty shrank $2.10 to trade at $10.50/Bbl versus WTI on Monday, the narrowest since August 2017
    • Increasing rail shipments have helped strengthen the differential as production has fallen (Bloomberg)
    • Late last year Alberta announced mandatory production cuts starting in Jan. ’19 to the tune of 325 MBbl/d

Natural Gas:

  • Natural gas is up 4.6c to $2.990/MMBtu
    • Weather models show a decent demand gain due to a weaker than expected warm period next week
      • Models begin inching toward a colder pattern late
      • Increase of 9.6 HDD’s
    • Cheniere ramp-up fuels US LNG feed-gas demand strength as the Corpus Christi Train 2 commissioning progresses(Platts)
    • Additions and expansions are expected to more than double the amount of domestic LNG feed-gas demand this year compared with 2018
    • Cheniere received FERC approval to introduce fuel gas to its 2nd liquefaction train in Corpus Christi
    • The Massachusetts attorney general wants FERC to investigate into whether a Tennessee Gas Pipeline expansion would impact the state’s ability to meet its greenhouse gas emissions goals as New England gas projects become increasingly difficult to develop (Platts)
      • Attorney General Maura Healey also asked FERC to look into alternatives such as “reduced gas use, non-gas alternatives and a no build alternative.”