Energy Complex Drifts Lower
The energy complex is drifting lower this morning with gas and diesel futures down less than a penny, WTI shedding about 15 cents to start the day. Despite anticipation of the U.S. and China signing Phase 1 of their trade agreement today, which took credit for the lackluster upward price action during yesterday’s session, the American crude oil benchmark is headed lower again this morning, in line with the downward trend it started last week.
Prices seem to be in "wait-and-see" mode ahead of this morning’s inventory report which is scheduled to be released at its normal time by the Department of Energy. Last Wednesday’s inventory build across the three major products certainly didn’t hamper the sizable selloff we witnessed that day, and with the API estimating another increase in stockpiles, we might be in for something similar this morning albeit less dramatic.
The EIA published it’s Short Term Energy Outlook yesterday and is predicting slightly higher WTI prices going into 2021, with a decrease in net imports (down from 2.3 million bbls/day in 2018 to .5 million bbls/day in 2019) outpacing an anticipated increase in production. In case you find an increase in price a little tough to believe given the persistent global glut of oil, rest assured the EIA is 95% confident the prices will be somewhere between $30 and $100 through the end of 2021.