First Look

September 12, 2019

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  • WTI is down $1.31 to $54.44/Bbl, and Brent is down $1.54 to $59.27/Bbl
  • The IEA, in its latest monthly report, highlighted the uphill battle OPEC+ will have in balancing the market
    • OPEC+’s challenge is keeping members committed to cuts to balance the market amid growing supply from competitors, according to the IEA
  • US crude stocks fell by more than analyst expectations on Wednesday, but close to what the API reported on Tuesday
    • Stocks fell by 6.9 MMBbl to 416.1 MMBbl last week amid higher exports
    • Cushing oil stocks fell by 798 MBbl/d to 39.3 MMBbl in the tenth straight week of declines
    • Crude exports rose by 234 MBbl/d to 3.3 MMBbl/d
  • Oil prices are down as a meeting between OPEC+ in Abu Dhabi contained no discussion about deeper supply cuts (Reuters)
    • Instead, discussions focused on bringing Nigerian and Iraqi production down to agreed quotas
    • Prince Abdulaziz bin Salman, the Saudis new energy minister, said deeper cuts would not be discussed until OPEC+’s December 5 and 6 meeting
  • Natural gas is down 1.0c to $2.542/MMBtu
  • Analysts estimate an 87-Bcf build in storage for the week ending September 6
    • Last year’s corresponding build was 68 Bcf
    • Analyst estimates ranged from 73 Bcf to 101 Bcf
  • The 11-to-15-day weather forecasts are predicting the emergence of cooler weather at the end of the month in the central portion of the United States
    • While the extension of summer heat into September is positive for natural gas prices, continued heat into the months of November or December would sap winter demand
  • Henry Hub prompt month prices may have lost some bonus momentum from traders covering their short positions
    • However, the market is still net short roughly 300,000 contracts
    • The last time the market was this net short was December 2017