EIA Lowers Growth Forecast for 2021

By Published On: September 10, 2020Categories: Daily Market News & Insights

On Wednesday, WTI crude followed US equities to close higher. Bearish inventory news coming from the API pared gains. A surprise build in crude and diesel reported by the API is pushing prices lower in early trading this morning.

According to the EIA Short-Term Energy Outlook: “despite expected inventory draws in the coming months, EIA expects high inventory levels and surplus crude oil production capacity will limit upward pressure on oil prices. EIA’s forecast for growth in 2021 is 0.5 million b/d less than in the August STEO. The downward revision is largely a result of lower expected consumption growth in China, which EIA now forecasts to grow by 1.0 million b/d in 2021.”

According to the Farmers’ Almanac extended forecast the US can expect a cold, snowy winter. “The long-range forecast is calling for a cold winter with normal to below-normal temperatures in areas from the Great Lakes and Midwest, westward through the Northern and Central Plains, and Rockies.”  The forecast is calling for more snow this year compared to last year with above-normal snowfall west of the Rockies.  Tank owners should consider testing for water and microbes ahead of the winter season, and fuel buyers in colder states should discuss timing of additives and blending with their suppliers before temperatures drop significantly.

The API’s data last night:

The API reported a surprise build for crude of 3.0 MMbbls versus an expected draw of 1.4 MMbbls.  At Cushing, stocks increased by 2.6 MMbbls.  The API reported that distillates had an increase in stocks.  Gasoline inventories had a large draw. The EIA will report numbers later this morning.

Crude prices are down this morning.  WTI Crude is trading at $37.96, a loss of 9 cents.

Fuel is mixed in early trading this morning.  Diesel is trading at $1.0917, a loss of 1.4 cents.  Gasoline is trading at $1.1276, a gain of 0.8 cents.

This article is part of Daily Market News & Insights

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