March 13, 2019

By March 14, 2019First Look

March 13

Crude Oil:

  • WTI is up 66c to $57.53/Bbl, and Brent is up 39c to $67.06/Bbl
  • Venezuela’s main oil ports are closed and most upstream production is shut it due to sweeping blackouts, according to PdV officials
    • The ongoing blackout has potentially caused structural damages
    • Amid unrest and deterioration within Venezuela, the US is withdrawing all remaining personnel from its embassy in Caracas
  • The EIA cut its domestic crude oil output for 2019 by 0.9% to 12.3 MMBbl/d (EIA STEO)
    • The agency also cut its 2020 forecast by 1.3% to an average of 13.03 MMBbl/d
    • Growing Permian production to face takeaway constraints again in the coming months, but the EIA expects that recent capacity additions will prevent price spreads from reaching levels hit back in the middle of 2018
      • New capacity coming online later this year will remove the remaining takeaway constraints
  • EIA petroleum data is due out this morning at 9:30 am CT
    • U.S. Crude Inventories:                  +  2,572 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:             –   2,857 MBbls
    • U.S. Distillate Inventories:             –   1,801 MBbls
    • U.S. Refinery Utilization:               +   0.37% change

Natural Gas:

  • Natural gas is down 0.5c to $2.779/MMBtu
  • Weather models show a slightly warmer South to East in the short-term with a warmer Midwest to South in the 6-10 day outlook
    • Cooler Northeast and Texas in the 11-15 day
    • Overnight demand fell 3.5 HDDs (CWG)
  • EIA forecast natural gas production to reach record levels in 2019 helping to ease inventory gap and prices (Platts)
    • 1Q 2019 gas production estimate has increased 0.78 Bcf/d to 96.03 Bcf/d, 2Q 2019 also seen an increase in their production estimate by 0.23 Bcf/d to 97.34 Bcf/d
    • EIA estimates inventories will come close to the 5 year average for next winters heating season
    • In February, coal power generation decline was estimated at 8%, the new estimate has increased to 12%
  • With storage stocks in the West running at multiple-year lows, a strong case for bullish prices exist, according to Platts
    • Maintenance at Westcoast started February 15 and looks to continue into summer restricting volume flowing through Sumas from 1.1 Bcf/d to 700 MMcf/d this summer
    • PG&E and SoCal Gas will likely exit March and enter summer injection season with the lowest stocks compared with the five-year average and rebuilding storage may be an uphill battle this summer, as the National Weather Service calls for warmer than-average weather April through October