Energy Prices Are Moving Lower To Start This Morning With Generic Terms Like “Profit-Taking”
Energy prices are moving lower to start this morning with generic terms like “profit-taking” being used as the reason why. Prompt month WTI futures are leading the way, currently down 1.34%, while the gasoline and diesel contracts lag behind at <1% losses.
Seems like everyone is feeling pretty optimistic about the latest wave of COVID cases finally subsiding. From Texas to Scandinavia, hospitals are seeing a drop in positive cases and hospitalizations and likewise a drop in lockdown policies. Maybe if Texas didn’t look like Scandinavia this morning we’d see some of the relaxed restrictions translate to increased consumer demand.
While natural gas futures are down nearly 10% this morning in pre-market trading, Northeast regional prices hit levels not seen since 2014. Supply bottlenecks and increased demand (AKA the usual suspects) seem to be the culprits in the price spike, reminding us the lesson many markets learned since the pandemic began two years ago: supply is only as good as its proximity to demand.
National gasoline stockpiles, as seen on yesterday’s report published by the DOE, only grew ~2 million barrels last week vs the 8 million barrels the API estimated on Tuesday. The market reaction to the difference between the two figures was muted with RBOB futures settling up just over 3 cents yesterday.
Crude oil stocks set new seasonal lows last week, which likely helped push the American crude oil benchmark to fresh 7-year highs, just shy of the $90 mark.