Another commodity trading year is upon us and New Year’s resolutions across the western hemisphere are cloaked with purpose and resoluteness. Many have vowed to exercise more, eat healthy and save money. Even though only about 8 percent of these New Year’s resolution ambitionists persevere with their said goals, it is nonetheless a feeling of excitement and optimism of what might be. Market participants in the energy sector are most likely seeking that same sensation of excitement for less volatility and more stable prices, more clarity in supply/demand across the globe, transparency with trade talks/tariffs, pellucidity with Iran sanctions and possibly a reverse course in actions to avoid a further global slowdown or even a recession. If, however, the first 2 trading days of 2019 for the WTI futures contract for February delivery price action is any indication of what lies ahead, we are in for more of the same rollercoaster ride of uncertainty, high volatility and event risk price movements. The first trading day of the year brought on an intraday range of $3.43 a barrel or a 7.18% intraday move. Today, as of 12:30pm EST, we have already seen a 4.51% move or a $2.14 a barrel intraday trading range.
With U.S. energy executives’ outlook turning negative for the first time since 2016, record production from the top 3 oil producers and continued fear of a global synchronized deceleration, it is going to take a whole lot more than a resolution in China – U.S. trade talks and an OPEC, Non-OPEC production cut commitment to spark any excitement or optimism towards the new year’s goals many participants have on their lists. Until the next major market moving headline or event, we await the APIs tonight and the DOEs tomorrow for at least one piece of the wish puzzle for the New Year, some more clarity in supply and demand.
Weekly Petroleum Status Report Estimates: