Election Uncertainty Creates Unknowns for Markets
November 4, 2020
The API report said crude stocks were down 8 million barrels and the crude stocks at Cushing, Ok were up 981,000 barrels. Gasoline stock were up 2.5 million barrels and distillate were down 577,000 barrels.
The average estimate for today propane report is that stocks we be down by 1.23 million barrels.
The Wall Street Journal reported that according to oil officials and adviser, Saudi Arabia and other OPEC members are considering deepening oil production cuts amid rising Coivid-19 case in the West and fresh economic lookdowns in Europe that could curb oil demand further. The debate comes at a time when the Organization of the Petroleum Exporting Countries had hope to be in a position to start turning production back on. Last month, The Wall Street Journal reported that Saudi Arabia and other producers had started debating whether or not to delay opening up the spigots by three months. OPEC officials said such a scenario, at a minimum, is now increasingly likely. This news and comments also from Russia on this same theme are offering support to prices.
The EIA forecasts that members of OPEC will earn about $323 billion net oil export revenues in 2020. If realized, this forecast revenue would be the lowest in 18 year.
Energy markets are higher this morning but there is still a lot of uncertainty about the election results and we are likely to not know anything concrete for several days. If the results drag on it will create uncertainty for the market and keep volatility high.