Biden Signs $1.2 Trillion Infrastructure Bill
November 16, 2021
Energy prices closed mixed in yesterday’s trading after being down hard in early trading hours of the day. Putting bearish pressure on prices is the continuing concern of a large release of barrels from the Strategic Petroleum Reserve to help lower gas prices for the Thanksgiving Holiday.
Also putting selling pressure on prices was the news from the EIA that US shale output will increase from November to December. The Monthly Drilling Report said the US shale production from the 7 major basins will increase by 85,000 bpd from November to December. The EIA also revised up November’s production number.
The US Dollar continued to trade higher putting in a 16-month high putting pressure on energy prices as well. Some analysts have said that the US Dollar has put in a bottom and will be on a slow move higher which could be a headwind for energy prices.
Supportive to prices was the signing yesterday by President Biden of the $1.2 trillion infrastructure bill into law.
The other top news causing concerns for energy bulls are the rising cases of covid that could impact demand and the news of increased production. These two factors could lead to selling pressure on the energy complex.
Vitol’s CEO, Russell Hardy, said any release from the SPR would not dampen the market or change things fundamentally in terms of price. He said demand is going to continue increasing into 2022. He said supply is not expected to grow significantly beyond OPEC. He said global oil market fundamentals will likely remains tight over the coming years as oil demand continues to build after having mostly fully recovered to 2019 pre-pandemic levels.