Market Commentary for May 21, 2020
NATURAL GAS

Henry Hub
Day change: $0.061, down 3.4% | Settle: $1.710  | June 2020
 
Waha Basis
Day change: UNCH | Settle: -$0.259 | June 2020
Low point on curve: -$0.703 | May 2021
 
TTF
Day change: $0.130, down 9.2% | Settle: $1.276 | June 2020
 
JKM
Day change: $0.100, down 4.6% | Settle: $2.095  | July 2020
 
Cryo-spread*
Day change: widened | Settle: -$0.430 | June 2020

  • EIA weekly natural gas storage report: inventories stand at 2.503 Tcf (+81 bcf w/w) compared to the 5-year avg. of 2.096 Tcf (+407 bcf and +19.4% over 5-year avg.)
  • Covid-19 impacted Japanese LNG demand in April as imports only reached 5.132 million tonnes (-8.8% y/y); April's total was the lowest imported since May 2010
  • A Bloomberg report highlighted the expectation for ~35-45 cargoes from U.S. LNG facilities will be cancelled in July with Cheniere affected by at least 17 cargoes...
  • ...for our upstream/midstream friends, that is in the realm of 100 bcf to 140 bcf of natural gas during July (expected to be cancelled) that will need to find a home...
  • ...or alternatively not be produced...
  • ...speaking of deferrals, Reuters reports Saudi Aramco's shipping division Bahri has postponed plans to charter up to 12 LNG tankers meant to lift LNG from the Port Arthur LNG project (delayed)
  • Tudor, Pickering, Holt & Co. analysts highlighted the fact that the Marcellus basin regained the crown for the highest concentration of frack crews in the U.S. (31%)...
  • ...as a point of comparison, the Permian had 42% vs. Marcellus' 12% during March
  • FERC continued handing out project certificates (like Oprah at Christmas) as the Alaska LNG associated pipeline development project received conditional approval

*The Cryo-spread is calculated by subtracting the NYMEX Henry Hub price from the premium LNG netback to the U.S. Gulf Coast.
OIL

Brent  
Day change: $0.31, up 0.9% | Settle: $36.06 | July 2020  
 
WTI  
Day change : $0.43, up 1.3% | Settle: $33.92 | July 2020  

  • We would be remise if we did not take a moment and recognize our friends in India that are not only facing Covid-19 impacts but also the affects of Cyclone Amphan and we wish them peace and safety during these impactful days
  • Crude prices have seen increases for the 6th consecutive day, matching the longest run of daily gains since February 2019...
  • ...Bloomberg reports that prices everywhere are rebounding around the globe with attention turning to "how sustainable will the recovery be?"
  • The Trump administration lowered royalties for some oil & gas producers that drill on federal lands, an attempt to provide relief to those who ask for it
  • Russia reports that crude oil exports are down 25% m/m for the first 20 days of May (-3.14 MMbpd, also known as "negative pi")
  • Another positive indicator is coming out of China in that Sinopec is said to be planning to cut exports of gasoline, diesel and kerosene by 50% during May vs. April levels with June export volumes being cut an additional 50% vs. May

Cautionary statement
We provide market commentary for informational purposes only; this information should not be construed as investment advice or as an offer to sell or the solicitation of an offer to buy any securities. Views and opinions expressed are current only as of the date shown, and Tellurian Inc. (the “Company”) does not undertake any obligation to update such views and opinions. Although information in the commentary is taken from sources believed to be reliable, the Company does not guarantee the accuracy, completeness or fairness of such information. In addition, market commentary may include forward-looking statements regarding commodity prices, regulatory and operational developments, future economic conditions and other matters. Such forward-looking statements are subject to numerous risks and uncertainties, including the risk of unanticipated changes in market, regulatory or business environments.
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