Energy Prices Are Pulling Back This Morning
Energy prices are pulling back this morning lead by Brent crude oil futures losing nearly 1% so far today. The three American benchmarks (WTI, New York gasoline and diesel) are all down around half a percent to start the day.
The monthly OPEC report published this morning is taking credit for the drift lower in futures prices. The cartel decreased its anticipated global oil demand growth for 2021 but noted how record natural gas prices could continue incentivizing drillers despite potentially unfavorable economics for crude oil.
The International Energy Agency’s World Energy Outlook, also published today, highlighted the slow-but-sure emergence of the renewable/carbon neutral energy industry. Even if the “Net Zero Scenario” is achieved, which the IEA notes will be a long and arduous road, they still anticipate a retention of ~80% of oil demand through 2030. The report also notes the anticipation of 2021 having the second highest increase in C02 emissions on record due to an increase in coal and oil use in place of cleaner options that are unavailable due to supply bottlenecks.
The ‘data deluge’ isn’t over: The Energy Information Administration will publish its Short Term Energy Outlook later today and inventory reports from the American Petroleum Institute and the EIA are both delayed due to Columbus/Indigenous People’s Day and will come out tomorrow.
WTI futures are trading below the psychologically important $80 level this morning, testing the rally’s meddle against the benchmark’s 5-day moving average. The technicals seem to indicate crude oil is overbought but a price correction would be met aptly by a slew of support levels between $70 and $80.