Energy Market Drifting Lower Reversing Course From Overnight Buying

Energy futures are drifting lower this morning, reversing course from overnight buying. The prompt month HO contract is leading the way lower, exchanging hands about 1.75 cents lower than yesterday’s settle, while RBOB sinks ~1 cent lower and WTI shaves off 65 cents per barrel (1.5 per gallon equivalent).

A Delaware judge approved an opening bid for Citgo’s parent company yesterday, kicking off the redo on the auction of the Venezuelan refiner at $3.7 billion. The sale, which has been in the courts for 8+ years, and actually already happened once, isn’t likely to be complete any time soon.

The International Monetary Fund cut its growth expectations for most countries in its World Economic Outlook yesterday. The IMF cites the extraordinary tariffs placed by the U.S. and, likewise, the retaliatory measures taken by its trading partners, as main driver of its sullen outlook. The fund anticipates global inflation to only rise slightly, save for the 1% bump anticipated in the U.S..

Of course that report may be for naught: there’s been an apparent tonal shift from the White House yesterday, hinting at a potential reversal of hardline trade war tactics. The current administration has appeared to take a softer stance on negotiations with China (to back off the U.S.’s 145% tariff that’s in place currently) and is no longer raring to fire the Fed Chair. Whether or not these intentions will last past this morning is guesswork, but the market seems to like it with S&P futures gaining 2.5% in premarket trading.

The American Petroleum Institute published their national energy published their national energy snapshot yesterday, featuring an across-the-board draw down in crude oil and refined product stockpiles. The Department of Energy will publish their official findings at their normal time this morning (9:30am CDT).