Trump’s Stimulus Demand Pressures McConnell

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On Tuesday, WTI crude closed lower but is clawing back some of those losses in early trading this morning. Bullish inventory news from the EIA is pushing the market higher today. The EIA reported draws across the board with total commercial petroleum inventories decreasing by 10.7 million barrels last week.

Congress has passed a $900 billion coronavirus stimulus bill, but President Trump has challenged his own party to reconsider the $600 stimulus payment. Trump has asked for a $2,000 stimulus payment, and Democratic leaders quickly jumped on board. Senate Minority Leader Chuck Schumer tweeted that “We spent months trying to secure $2000 checks, but Republicans blocked it.” Trump’s demand puts pressure on Senate Majority Leader Mitch McConnell, who led the charge for a smaller stimulus package. The president has put McConnell in the position of having to cave in to his demands or have Republicans stand firm and appear stingy with their smaller stimulus payment. Possibly at stake is the Georgia runoff elections in January and control of the Senate.

All parties agree on the need for stimulus to help ordinary citizens who have been impacted by the coronavirus and inject life into the US economy. The markets have been waiting for economic stimulus for many months. Once enacted, individuals and markets will experience a much-needed boost.

The EIA reported a decrease for crude of 0.6 MMbbls, compared to an expected decrease of 3.2 MMbbls. US crude oil inventories are about 11% above the five-year average for this time of year. Distillates reported a draw and continue to trend roughly 10% above the five-year average. Gasoline inventories had a draw and are about 4% above the five-year average.

Crude prices are up this morning.  WTI Crude is trading at $48.35, a gain of $1.33.

Fuel is up in early trading this morning.  Diesel is trading at $1.5008, a gain of 3.9 cents.  Gasoline is trading at $1.3824, an increase of 4.3 cents.