Opening Prices:
> June is now the front month NYMEX contract for WTI. It opened at $24.68, but is now trading at less than $23.00.
> The June contract for natural gas is up 3 cents to $1.93.
Closing Prices:
> The June NYMEX contract for WTI closed at $20.43. < Pulled down by what happened to the May contract today.
> The June NYMEX contract for natural gas closed at $2.049
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The Energy Report: Oil Demand Plunges Further
By Phil Flynn Apr 20, 2020 09:27AM ET
I guess you can party like it’s 1999 as long as you remain socially distant. The price of oil has hit the lowest levels since that iconic year as global oil demand has plunged and the world worries about running out of oil storage. Of course, as terrible as oil looks, when you look at the 1999 low for oil, it was a great long term buying opportunity. We know that low prices eventually cure low prices. The Asian financial crisis caused oil to dip into the 10 dollar handle, yet set the stage for the Chinese industrial revolution that was built on cheap oil. Yet this time around the hit to demand is unlike anything we have experienced. But the one thing we do know is, it is taking out a big part of the U.S. shale oil industry and is cutting energy capital spending by record amounts.
While we are probably setting the stage for a significant bottom in oil, it does not matter for the May futures contract that will be delivered into a nightmarish bearish situation. Not only has demand ground to a standstill. The impact of oil cuts from OPEC-Plus also will not start in time for the current delivery. Saudi Arabia is set to sell about 600,000 barrels a day of crude to the U.S. in April, the highest volume in a year.
We could be looking at one of the worst deliveries for WTI ever as refiners are not running at high rates, and storage is getting full at the Cushing, Oklahoma delivery point.
Cushing's working storage capacity can hold 76 million barrels. Cushing inventory was 55 million barrels, according to EIA at the end of April 10, and as of the latest data up to April 14, according to Genscape, Cushing is at 60.66 million barrels. Yet it is not just Cushing that is filling. Reuters is reporting that traders are storing an estimated record of 160 million barrels of oil on ships - double the level from two weeks ago.
Reuters reported that China pushed crude oil into storage tanks at almost double the rate in the first quarter of this year than it did in the same period in 2019 as the new coronavirus hit domestic consumption. China's crude oil imports were 10.2 million barrels per day (bpd) in the first three months of the year, according to customs data. Domestic output was 3.74 million bpd, giving a total of available crude for the quarter of 13.94 million bpd. Refining, throughout the first quarter, was the equivalent of 11.96 million bpd, meaning of the total available crude of 1.98 million bpd wasn't processed by refineries.
Doing the same calculations for the first quarter of last year shows imports of 9.83 million bpd, domestic production of 3.84 million bpd, and refinery processing of 12.6 million bpd, leaving a gap of 1.07 million. The numbers suggest that China almost doubled the rate at which it put oil into storage in the first quarter of 2020, in order to deal with the loss of consumption as the coronavirus caused much of the country to be placed in some form of lock-down. China's exports of refined fuels also rose in the first quarter of this year, reaching 18.02 million tonnes, up 9.7% from the same period last year. A breakdown by type of refined product isn't yet available, but it's likely the bulk of the increase was in gasoline and middle distillates such as jet kerosene and diesel. Overall, the picture that emerges from the first quarter is that China decided to increase crude storage flows rather than cut back on imports.
Gasoline prices are still plunging just as summer blends of gasoline are supposed to be produced. DTN reports, "The governors of five states have asked the EPA to waive Renewable Fuels Standard volume obligations citing the current COVID-19 national emergency, in a letter sent to the agency on Wednesday. Governors Greg Abbott of Texas; Gary Herbert, Utah; Oklahoma's Kevin Stitt; Mark Gordon of Wyoming; and Louisiana's John Bel Edwards, said refiners in their states face financial burden as a result of oil-market disruptions caused by economic shutdowns around the world. "Under this waiver provision for severe economic hardship, the U.S. Environmental Protection Agency must assess the condition of the refining sector as it finds it under current circumstances," the letter said.
Natural gas is finding support as plunging rig counts are lowering production expectations.
Oil & Gas Prices - April 20
Oil & Gas Prices - April 20
Last edited by dan_s on Mon Apr 20, 2020 5:36 pm, edited 1 time in total.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - April 20
Notes from John White at Roth Capital 4-20-2020
On April 17 Reuters reported China's daily crude oil throughput in March sank to a 15-month low. Crude runs over the period came in at 11.98 million b/d, down 4.6% from a year earlier, National Bureau of Statistics data shows. In March, throughput was about 11.78 million b/d. That was below a total of 12.07 million b/d over the first two months and 12.49 million b/d in March 2019. It was also the lowest since December 2018. But with local governments lifting curbs, oil refineries are ramping up output to meet an expected recovery in demand. Average utilisation rate at refineries across China reached 71.65% this week from as low as 67.5% in mid-February, according to data tracked by Longzhong Information Co.
On April 17 Reuters reported China's aviation fuel sales jumped 45% last month from February to 1.2 million tons as some flights resumed following an easing of some coronavirus-related curbs, but were down by nearly half from a year earlier, an industry official with access to the data said.
On April 17 Reuters reported China's economy contracted for the first time on record in the first quarter as the coronavirus shut down factories and shopping malls and put millions out of work. GDP fell 6.8% in January-March year-on-year, official data showed on Friday, a slightly larger decline than the 6.5% forecast by analysts and reversing a 6% expansion in the fourth quarter of 2019. It was the first contraction in the world's second-largest economy since at least 1992, when official quarterly GDP records were first published.
On April 17 Reuters reported the Trump administration is seeking to ease a severe cash crunch in the drilling industry by raising loan limits available under a coronavirus stimulus package and by barring lenders from discriminating against drillers, according to Energy Secretary Dan Brouillette. Brouillette said he was working with Treasury Secretary Steve Mnuchin to roughly double the size-limit on loans available to mid-tier U.S. energy companies under the recently passed CARES Act stimulus package to $200-$250 million to help them weather the fallout of the pandemic.
On April 16 Reuters reported ConocoPhillips (COP-NC) said it would slash spending and cut U.S. oil output by about 30% of this year's target, the largest cut so far by a major shale producer to deal with an unprecedented drop in oil demand. ConocoPhillips will reduce planned North American output by 225,000 b/d, with the largest cut in its shale output, the company said.
On April 17 Reuters reported traders are storing an estimated record 160 million barrels of oil on ships - double the level from two weeks ago as they seek to tackle a glut of stocks created by a slide in global demand from the coronavirus, shipping sources say. The last time floating storage reached levels close to this was in 2009, when traders stored over 100 million barrels at sea before offloading stocks.
On April 17 Reuters reported China's daily crude oil throughput in March sank to a 15-month low. Crude runs over the period came in at 11.98 million b/d, down 4.6% from a year earlier, National Bureau of Statistics data shows. In March, throughput was about 11.78 million b/d. That was below a total of 12.07 million b/d over the first two months and 12.49 million b/d in March 2019. It was also the lowest since December 2018. But with local governments lifting curbs, oil refineries are ramping up output to meet an expected recovery in demand. Average utilisation rate at refineries across China reached 71.65% this week from as low as 67.5% in mid-February, according to data tracked by Longzhong Information Co.
On April 17 Reuters reported China's aviation fuel sales jumped 45% last month from February to 1.2 million tons as some flights resumed following an easing of some coronavirus-related curbs, but were down by nearly half from a year earlier, an industry official with access to the data said.
On April 17 Reuters reported China's economy contracted for the first time on record in the first quarter as the coronavirus shut down factories and shopping malls and put millions out of work. GDP fell 6.8% in January-March year-on-year, official data showed on Friday, a slightly larger decline than the 6.5% forecast by analysts and reversing a 6% expansion in the fourth quarter of 2019. It was the first contraction in the world's second-largest economy since at least 1992, when official quarterly GDP records were first published.
On April 17 Reuters reported the Trump administration is seeking to ease a severe cash crunch in the drilling industry by raising loan limits available under a coronavirus stimulus package and by barring lenders from discriminating against drillers, according to Energy Secretary Dan Brouillette. Brouillette said he was working with Treasury Secretary Steve Mnuchin to roughly double the size-limit on loans available to mid-tier U.S. energy companies under the recently passed CARES Act stimulus package to $200-$250 million to help them weather the fallout of the pandemic.
On April 16 Reuters reported ConocoPhillips (COP-NC) said it would slash spending and cut U.S. oil output by about 30% of this year's target, the largest cut so far by a major shale producer to deal with an unprecedented drop in oil demand. ConocoPhillips will reduce planned North American output by 225,000 b/d, with the largest cut in its shale output, the company said.
On April 17 Reuters reported traders are storing an estimated record 160 million barrels of oil on ships - double the level from two weeks ago as they seek to tackle a glut of stocks created by a slide in global demand from the coronavirus, shipping sources say. The last time floating storage reached levels close to this was in 2009, when traders stored over 100 million barrels at sea before offloading stocks.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil & Gas Prices - April 20
(Reuters) - Numerous U.S. and Canadian oil companies have said they are reducing output in 2020, but a Reuters analysis of the announcements so far show that just three companies - Chevron Corp (CVX.N), ConocoPhillips (COP.N) and Occidental Petroleum Corp (OXY.N) - account for more than half of the cuts.
Read: https://www.reuters.com/article/us-glob ... SKBN21Z26C
Read: https://www.reuters.com/article/us-glob ... SKBN21Z26C
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group