Among the many geopolitical issues going on in the world effecting the oil market, there have been reports this week that President Trump is considering tapping into the Strategic Petroleum Reserve (SPR) in an effort to lower gasoline prices. According to Bloomberg, “options are under consideration ranging from a 5 million barrel test sale to a more sizeable release of 30 million barrels and a third option of a larger release that would be coordinated with other nations.” Utilizing any of these options would create a shift in global crude oil prices.
On May 22nd WTI Crude nearly reached $73 / barrel and since then prices have dipped almost 10%.
Trading is tepid today after bullish geopolitical news sparked weekly gains across the board. Technically, the market is extremely overbought, but the computers may be apprehensive to sell until any of the following issues are resolved.
The US economy is growing and so is the population, both of which are leading freight companies of all types to see increased growth in the number and weight of goods shipped around the country. Truck load (TL) freight volumes increased 2.8% in 2017 over 2016 which is far higher in comparison to 2016 versus 2015. Fourth quarter of 2017 for TL alone was at 7% growth year over year.