First Look

September 11, 2019

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  • WTI is up 63c to $58.03/Bbl, and Brent is up 68c to $63.06/Bbl
  • Crude oil prices took a dive on Tuesday after the announcement that John Bolton was out as Trump’s US National Security Advisor
    • Bolton’s departure removes some supply-risk premium as the former National Security Advisor was hawkish on policy related to Iran and Venezuela
    • AEGIS notes that US sanctions on Iran alone have caused Iranian oil production to fall almost 50% since May 2018
  • Prices have recovered as of this morning after the American Petroleum Institute announced a 7.23 MMBbl draw in crude stocks on Tuesday afternoon
    • Government data is due out this morning and the traders will be looking for conformation of the API’s large estimated draw
  •  OPEC+ will discuss whether there is a need in the oil markets for a deeper supply cut when the JMMC committee meets on Thursday, according to Iraq’s oil minister (Reuters)
    • This is in contrast to report by S&P Platts that says OPEC officials have stressed the JMMC does not have the mandate to consider policy changes
    • The Joint Ministerial Monitoring Committee, known as JMMC, is made up of select OPEC+ members and typically meets throughout the year more often than the full OPEC delegation
  • EIA petroleum data is due out this morning at 9:30 am CT
    • U.S. Crude Inventories:                  –    2,655 MBbls (Bloomberg surveys)
    • U.S. Gasoline Inventories:             –        857  MBbls
    • U.S. Distillate Inventories:             –         509  MBbls
    • U.S. Refinery Utilization:               –     0.55% change
  • Natural gas is down 4.9c to $2.531/MMBtu
  • The EIA has lowered its short-term Henry Hub spot price outlook by $0.20 to average $2.55/MMBtu
    • The EIA cites the potential of continued production growth as the biggest reason for the lower price revision
      • They are currently forecasting production to average 93.2 Bcf/d in 2020
    • The agency also notes that continued LNG export growth could help support prices through the duration of the forecast
  • There is currently a 60% chance of a cyclone formation over the next five days
    • Current forecasts have the trajectory of the storm entering the Gulf of Mexico
    • As of now, it remains to be seen whether this weather disturbance will evolve into a storm capable of impacting supply in the region
  • LNG feed gas flows have risen back above the 6.0 Bcf/d threshold
    • PointLogic notes that the biggest increase is coming from the Sabine Pass facility
    • This could signal that the scheduled maintenance on Train 5 is nearing completion