Daily Energy Report
Crude Oil Futures for April 2020 settled up $0.43 @ $47.18/bbl trading in a $2.19 range including the overnight-RBOB settled down 0.83/cpg and Heating Oil settled up 0.43/cpg.
Regardless of its tendencies to cause chaos in the global oil markets by closing and or disrupting the Strait of Hormuz -and with the necessity to keep its own oil exports revenues to Asia rolling in-Iran has moved exceptionally quickly on developing its Bandar-e-Jask port project. Crucially, Jask is not located in the perennially risky Strait of Hormuz but south-southeast in the Gulf of Oman. This offers a relatively risk-free shipping transit route to Iran’s key markets in the East, especially China and more latterly India, and to markets further south in Africa on a more occasional basis.
Natural Gas Futures for April 2020 settled up $0.044 @ $1.800/mmbtu trading in a .083 cent range including the overnight session.
The Coronavirus outbreak is dealing a heavy blow to the three largest import markets of Liquefied Natural Gas – Japan, China, and South Korea. The world’s top three importers of LNG are also the three hardest hit countries of the Coronavirus outbreak. The demand slowdown amid the outbreak comes on the heels of a milder than average winter in North Asia and high LNG inventories across Asia this season. All these factors have sent LNG prices to multi-year lows. Last month, China National Offshore Oil Corporation was said to have declared Force Majeure on deliveries of LNG cargoes and will not be honoring some of the deliveries because of the deadly Coronavirus outbreak. Even before Chinese importers started invoking force majeure on deliveries, LNG prices had hit a decade low.