Energy Complex Trading Lower on OPEC news today
The energy complex is trading lower today on news that OPEC and its allies have no immediate plans of cutting any further production. Furthermore the cartel cut its 2019 petroleum demand growth estimates while the International Energy Agency warns of a global oil surplus going into 2020. What seems like bearish news all around has pushed WTI futures below $55, wiping out the 4-day rally that started late last week.
The Department of Energy’s weekly inventory report published yesterday showed crude oil stockpiles below their 5-year average for the first time since March. Low imports, high exports, slowing output, and climbing refinery runs all contributed to the drop but the bullish sentiment of yesterday’s publication was overshadowed by dismal demand estimates as futures sold off.
Tropical Disturbance 1 made its way further northwest yesterday and forecasts now have the system pointed at southern Florida with an 80% chance of cyclonic development over the next week. The latest estimated path comes as good news for refiners as the warm waters in the Gulf of Mexico are known to accelerate development dramatically; Florida could end up taking a bullet for the other coastal states.