November 30, 2018

By December 1, 2018First Look

November 30

Crude Oil:

  • WTI is down 74c to $50.71/Bbl, and Brent is down 72c to $59.19/Bbl
  • Oil is on the path for the largest monthly drop since 2008, only one week before OPEC convenes in Vienna (Bloomberg)
    • The question leading up to next week’s meeting is – Will OPEC cut and if so will they cut enough to offset growing supply?
  • Mexico will suspend upstream auctions for at least two years, according to future energy minister Rocio Nahle
    • At an event in Mexico city this week Nahle said “Following a two-year evaluation period, we will be able to determine whether we continue on this path or whether we pick a more intensive route, or another route completely”
    • More than 100 oil contract have been awarded since energy reform opened up Mexico’s oil and gas sector to private-sector companies (Argus)
  • As Canada suffers from historically low crude discounts, Alberta’s Premier Rachel Notley reiterated her call for Canadians to support new oil pipelines
    • At her speech in Toronto she made no mention of possible mandated crude-production cuts (Bloomberg)
      • Many producers in the region have been asking Notley to mandate short-term curtailments to help reduce storage, according to Bloomberg

Natural Gas:

  • Natural gas is down 3.9c to $4.607/MMBtu
  • This morning weather models show lower heating demand for the East Coast and Northeast on the 11-15 day
    • The 1-5 day shows slightly warmer weather for the Southeast, while the 6-10 day stayed mostly the same for the country
  • U.S. natural gas exports hit a new record as Mexico imported roughly 6 Bcf/d in August, according to EIA (Houston Chronicle)
    • About 5.1 Bcf/d was delivered via pipelines while another 860 MMcf/d was transported using liquefied natural gas import terminals
    • The increase in U.S. exports comes as Mexico continues to see a decline natural gas production; down 7% year-over-year
  • On Thursday, US Secretary of Energy Rick Perry reiterated his arguments that energy infrastructure is critical to national security (Platts)
    • Rick Perry stated that “99% of the military bases in the continental United States are attached to our civilian grid.”
    • Perry pointed out New York in particular of states who have made it difficult for US-produced gas to travel across the state, as New York regulators have recently denied two water quality permits for major pipeline projects