Oil is trading higher, near $79, extending gains from yesterday
Fires in the Texas panhandle are threatening the 149 MBbl/s Phillips 66 Borger refinery
The API forecasts an 8.43 MMBbl build in crude inventories, which would bring US inventories to the five-year average
Chinese oil demand to slow on softer economy (BBG)
CNPC’s Economics and Technology Research Institute said that China’s oil demand is entering a low-growth phase, driven by a slowdown in refined products demand growth
China’s crude purchases have been firm following the Lunar New Year, but concerns persist
While the pace of demand growth will slow, demand is still expected to increase over the next several years
Transmountain raises cost estimates again (BBG)
The expansion of the Transmountain pipeline, which will transport Canadian heavy crude from Alberta to Vancouver for export, will cost an additional $2.3 billion
The total cost of the long-delayed pipeline has now risen to just over $25 billion, six times more than the original estimate of $4 billion in 2013
The pipeline is expected to enter service in Q2 2024, which should expand export capacity for Canadian oil
Natural gas prices find support from low production going into the last month of the winter heating season
April ’24 Henry Hub is up 5c this morning to trade around $1.858/MMBtu
The Summer ’24 strip is up 1.6c to $2.330, and the Winter ‘24/’25 strip is up 1.3c to $3.409
Today's Euro Ens indicates warmer temperatures across most regions, with less extreme cooling expected in mid-March, maintaining lows in the 40o F
Lower 48 natural gas production remains steady at around 101.5-101.6 Bcf/d, with a gain in the South Central offset by drops in the Northeast & Rockies (Criterion)
Additionally, Freeport LNG extends its month-long third train outage for an additional two weeks to complete motor repairs following freeze-induced electrical issues in January (NGI)
Possible pipeline delay would crimp LNG feedgas supply from Haynesville in 2025 (S&P)
Momentum Midstream's 1.7 Bcf/d NG3 pipeline, crucial for 2025 LNG demand in the Gulf Coast, risks delay due to Energy Transfer litigation
Energy Transfer's injunctions have halted NG3's progress, with the trial set for Sept. 9, introducing uncertainty into the project's completion timeline
Despite potential delays, Haynesville is expected to have 2.3 Bcf/d spare capacity by 2025, which could be quickly absorbed by new LNG projects like Golden Pass and Plaquemines LNG, stressing the need for timely pipeline expansions
Furthermore, Williams plans to bring its 1.8 Bcf/d LEG pipeline online in 2H 2025, while DT Midstream's LEAP Phase 3 targets a Q3 2024 start, with discussions for a further expansion to meet future needs
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