Crude prices and oil products soared on hopes of gridlocks and goldilocks and a potential economic growth explosion, says Phil Flynn of the PRICE Futures Group.
While the outcome of the presidential election still hangs in the balance, the prospects that a Republican Congress that can block a corporate tax hike and the hopes for low rates and stimulus should get the economic juices flowing.
Oil prices also rallied on a supportive Energy Information Administration (EIA) supply report even though hurricane-related disruptions impact the data.
Senate leader, Mitch McConnell, is increasing the odds of a stimulus package. Marketwatch reported, “The Senate goes back in session next Monday. Hopefully, the partisan passions that prevented us from doing another rescue package will subside with the election,” Senate Majority Leader Mitch McConnell said at a press conference Wednesday. “I think we need to do it. We need to do it before the end of the year.” With the fact that the Republicans still have the Senate and the Democrats the house, the odds that any massive tax hikes on corporations are nil, and they should provide a Goldilocks run for American business.
The EIA reported that commercial oil stocks fell 14.7 million barrels to 97 million barrels, and that was the first time since the pandemic that the surplus year over a year fell below 100 million barrels. US commercial crude oil inventories plunged by 8.0 million barrels from the previous week. At 484.4 million barrels, US crude oil inventories are about 7% above the five-year average for this time of year.
Total motor gasoline inventories increased by 1.5 million barrels last week and are about 4% above the five-year average for this time of year. Distillate fuel inventories decreased by 1.6 million barrels last week and are about 18% above the five-year average for this time of year.
While crude exports plunged, they are still around the 3.2 million barrel a day range, and we expect that in the next few weeks, as things get back to normal in the Gulf of Mexico, those exports will surge.
Natural gas gets its data, and we should see a draw in supply. Next week the warm-up in the Midwest and we should see a build, but that may be the last increase of the year. Buy calls going into winter.
Learn more about Phil Flynn by visiting Price Futures Group.
