Dec 6, 2018

Dec. 6, 2018 - Daily Energy Update

By Sarfaraz A. Khan

WTI crude oil: $52.35 a barrel
Brent crude: $61.04 a barrel
Natural gas: $4.42 per MMBtu

Oil prices fell slightly amid the stock market selloff but trading remained low as markets looked forward to the OPEC meeting which is widely expected to result in a supply cut aimed at rebalancing the market after crude plunged 30% since October. President Trump weighed in with the following tweet:

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Two major Canada to US crude oil pipelines have resumed operations. TransCanada Corp (TRP)’s 590,000 bpd Keystone pipeline and parts of Enbridge Inc (ENB)'s 1.2 million bpd Mainline system were hit by power outages on Tuesday but both resumed operations a day later. (Link)

The US is on track to achieve President Trump’s goal of ‘energy dominance,’ Marathon Petroleum Corp (MPC)’s CEO Gary Heminger said in an interview with CNBC’s Jim Cramer. The US is already “the largest producer in the world today,” Heminger said. Heminger expects oil prices to rise in 2019, averaging within the $65 to $70 a barrel window in 2019. (Link)

Petrobras (PBR) says it could raise up to $26.9 billion through asset sales and partnerships by 2023. The Brazilian company is targeting $84.1 billion in investments in its five-year business plan, primarily in the oil fields in the subsalt frontier that would push the country’s  crude oil production to almost 2.8 million bpd by 2023. (Link)

Canadian Natural Resources (CNQ) says it is planning CapEx of C$3.7 billion for FY-2019, down almost C$1 billion from this year. Canada’s largest oil producer has attributed the 20% drop in spending to a lack of market access for crude oil and the “dysfunctional” pipeline nomination process. But the company noted that around 615,000 bpd of new takeaway capacity will come online by Q4-2019. This, combined with Alberta government’s decision to mandate output cuts of 8.7%, should help Western Canadian producers. (Link)