Senate Debt Limit Deal Sparks Market Rebound
October 8, 2021
Equities markets rebounded yesterday when the news hit that a deal was reached in Congress to raise the debt ceiling through December. This was also supportive of energy prices which rallied as well.
The news that the US would release barrels from the SPR has been a whirlwind of back and forth information and contradiction. A Bloomberg News reported said in a tweet that the US Department of Energy is not considering tapping into its Strategic Petroleum Reserves “at this time”, nor is it pursuing a ban on oil exports. An Energy Department spokesperson said the department has no plan to take action “at this time” to tap into the SPR. Later, the US Department of Energy said all “tools are on the table” to tackle tight energy supply conditions in the market. Meanwhile, White House spokesperson, Karine Jean-Pierre, said it is looking at ways to relieve Americans’ energy costs but has no plan to take any specific actions for now. This comes after the Financial Times on Wednesday quoted the US Energy Secretary Jennifer Granholm as saying that the administration is considering tapping the SPR, while also not ruling out a ban on crude oil exports.
RBC Capital Markets said comments from US Energy Secretary, Jennifer Grandholm, about the potential release of crude from the SPR “were clearly aimed at trying to incentivize Saudi Arabia and its OPEC+ partners to put more barrels on the market.”
Citigroup said it is “only a matter of time” before OPEC+ accelerates supply increases, especially if oil remains over $80 per barrel.
Natural gas prices fell after Russian President Putin said Russia would boost natural gas supplies to Europe and that sales to Europe could hit a record high.
The US added fewer new jobs than forecast for a second month in September. US nonfarm payrolls rose by just 194,000 and the expectation was for 500,000.