North America Crude Markets short-term outlook: July 2020

The glimmers of hope are growing stronger for US producers with WTI breaching $40/bbl, proving pricing strength sufficient to bring back shut-in volumes as the market begins its slow but steady churn toward balance. Demand continues to grind higher resulting in higher refinery consumption and continued slowing onshore storage builds. Meanwhile, Canada-based Enbridge was forced to shut its Line 5 pipeline in June. With regulatory hurdles now on the horizon, material regional pricing impacts could be looming. In this short-term report, we explore:- Lower 48 crude production revisions as a result of a dwindling rig count -Impacts of shuttering Enbridge’s Line 5 on regional prices and crude flows -Misleading fundamental message from sustained Cushing stock draws