March 12, 2019

By March 13, 2019First Look

March 12

Crude Oil:

  • WTI is up 45c to $57.24/Bbl, and Brent is up 57c to $67.15/Bbl
  • US energy secretary Rick Perry says sanctions on Venezuela will continue despite risks to US refiners and other industries (Argus, IHS-CERAWeek)
    • Heavy sour oil production from Venezuela has declined since the US levied sanctions on the OPEC nation’s oil sector
      • Complex refiners worldwide favor the heavier sour variety in their feedstock mix
    • The IEA projected that Venezuela’s oil production capacity will fall to 750 MBbl/d this year and stay at that level through 2024, according to the IEA’s annual Oil 2019
  • Gulf coast Mars medium crude oil vs WTI spot reached highs not seen since mid-February and 2013 before that
    • Heavy and medium crudes have been buoyed by outages in Venezuela and continued OPEC cuts
    • Mars-WTI settled at a $7.90/Bbl premium yesterday
    • Other crude oil tied to the waterborne market have also appreciated as of late
      • LLS-WTI is at a $8.30/Bbl premium as Cushing stocks build and supply internationally continues to tighten

Natural Gas:

  • Natural gas is down 1.9c to $2.753/MMBtu
  • Weather models show a warmer Midwest in the short range with a slightly warmer West and cooler Texas in the 6-10 day outlook
    • Overnight demand fell 9.7 HDDs (CWG)
  • Freeport LNG expects to ship their first export cargo in July (Platts)
    • Project has faced several delays with the most recent being Hurricane Harvey in August 2017
    • Feed-gas is expected to start flowing to the facility in April or May
  • WAHA prices hit a 4 week low as producers continue to test takeaway capacity limits (Platts)
    • Cash price settled at $.73/ MMBtu on Friday
    • Production has averaged around 8.7 Bcf/d in March, After reaching a record high 9.2 Bcf/d in late February