EIA Short Term Energy Outlook Dramatically Lowers Crude Pricing
December 13, 2023
The API inventory report estimated crude supplies down 2.3 million barrels, gasoline supplies up 5.8 million and distillates up 280,000 barrels.
The average estimates for today’s EIA inventory report from the Bloomberg survey is for crude supplies to be down 2.204 million barrels, gasoline supplies up 1.745 million and distillate supplies up 203,000 barrels.
Crude oil and ULSD prices fell by almost 4% in yesterday’s trading, which was mainly driven by concerns of petroleum oversupply in 2024 after the US CPI showed an unexpected rise of 0.1% in November 2023 from October 2023.
Energy prices did not show much reaction overnight on the news of a fuel tanker being struck by a Houthi missile as it navigated the Red Sea. At least 10 merchant ships have now been attacked or approached around Yemen since Israel’s war with Hamas broke out in October.
The EIA reported their Short Term Energy Outlook (STEO), and they lowered their WTI and Brent crude oil price forecast dramatically for 2024 by $11 dollars per barrel down to $78.08 and $82.58 respectively. The EIA did however forecast much lower world petroleum supplies and slightly lower demand for a net drop in supplies of 264,676 bpd worldwide in 2024.
The Federal Reserve Open Market Committee (FOMC) meets today, and decisions concerning monetary policy and comments about the state of the economy could impact the energy markets later this afternoon. At this point the sentiment is that rates will be left unchanged.
The outlook for the propane inventory report today is a draw of 2.24 million barrels and the five year average is a draw of 2.324 million barrels.