Iranian Missile Launch Hits U.S. Bases
January 8th, 2020
The news again for today is again all about the US and Iran. Last night around 6 PM CST the new broke that Iran had launched more than a dozen ballistic missile against multiple bases housing US military troops in Iraq. As the new of this attack broke energy price in overnight trading jumped up over eight cents per gallon on the initial report. Stock futures sold off hard as well.
The events over night will be the news of today as the President is supposed to talks this morning. I have still not seen any reports about any injuries or death as a result of the actions. That could certainly impact the US’s response.
Much like the news of the bombing and killing of Qassem Soleimani, the initial reaction of the market was to jump higher and then ease back as calmer mind prevail. The energy market has come most of the way down off the overnight highs with ULSD and RBOB futures up about a penny at this writing. Traders will wait on any new news about this events and much like last week now the market sits and wait to try and figure out what is next.
During the trading day yesterday crude oil and refined fuels products pulled back slightly as up to that point there had been no response from Iran. The market was just sitting and waiting for what was next, and again that is where the market appears to be for now until more details are release.
Foreign Minister Mohammad Javad Zarif, said on Twitter the government “concluded proportionate measure in self-defense” after the Soleimani strike. “We do not seek escalation or war, but will defend ourselves against any aggression, “ Zarif wrote. Many are hoping that this might be a signal that they have done their retaliation against the US and not all is even if your will. Again, all we can do is wait and see what details emerge an get a feel for what may potentially be next. That uncertainty and increased tension in the Middle East will certainly keep the markets on edge.
The API inventory report out yesterday late called crude down 5.9 million barrels. The outlook for today’s DOE report is for crude to be down 3.6. Gasoline stocks on the API were up 6.7 and the average estimate for today is a build of 2.7 million barrels. Distillate stocks were up 6.4 million barrels and the outlook for today is for them to be up 3.9.