April 29, 2021

April 29, 2021
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  • China sees record-breaking travel pickup ahead of Labor Day
    • According to trip.com, people will make an estimated 200 million trips, surpassing the record for the national holiday previously set in 2019
    • Bookings for seats on planes, hotels, and car rentals were up 23%, 43%, and 126%, respectively, compared with the same period in 2019, according to estimates from Trip.com
  • India’s COVID surge may lead to supply glut (Reuters)
    • The surge is expected to reduce oil liquids demand by an average of 575 MBbl/d in April, and 915 MBbl/d in May, according to Rystad Energy
    • India reported 379,257 new cases on Thursday, with 3,645 new deaths, making it the deadliest day for any country since the start of the pandemic
  • The EIA reported a build of (+) 90 MBbls for the week ending April 23, above the estimate of a (-) 60 MBbls draw
    • Inventories for the US are now at a deficit of 25.533 MBbls to last year and a surplus of 3.70 MBbls to the five-year average
    • Refineries are now running at a post-pandemic high of 85.4% of capacity as they scramble to produce more gasoline ahead of the summer driving season
  • The now prompt June gas contract is trading lower Thursday morning for the first time since April 23, following a 15c rally to $2.96
    • The remainder of the Summer 2021 strip (Jun-Oct) is trading just shy of $3.00 at $2.98
    • Winter 2021-2022 has also participated in the multi-week rally, now near $3.13, about 10c shy of its high in the past five years
    • Summer 2022 has continued to languish compared to the front two gas seasons. Our recent webcast addressed some of the possibilities as to why
  • Natural gas production growth in the Bakken is likely under current D&C activity (Oneok, Platts)
    • Oil production in the US isn’t expected to reach pre-pandemic levels until at least late 2023, according to Platts, but additional processing and higher gas-to-oil ratios might lead to natural gas in the Bakken
    • Oneok plans to bring another 200 MMcf/d of processing capacity online at the end of 2021
    • “The Williston Basin continues to surpass our expectations,” Oneok CEO Terry Spencer said. “Our increased operations were not reliant on increased rig activity or commodity prices. Instead, it is based on DUC inventory, rising GOR rations, and increased ethane demand.”

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