New York—Crude oil futures finished a volatile session mixed Jan. 26 as the market searched for direction amid US stimulus headwinds and bullish economic data.
NYMEX March WTI settled down 16 cents at $52.61/b, while ICE March Brent climbed 3 cents to $55.91/b.Newly elected US President Joe Biden is facing major hurdles to his $1.9 trillion stimulus plan in the US Senate, where Democrats are unable to reach an agreement with their Republican counterparts over the size of the bill. With such high hopes placed on looser fiscal policy measures under a new administration, such political impasse has not gone down well with wider financial markets, including oil.
The US House of Representatives delivered to the Senate a single article of impeachment against former-President Donald Trump Jan. 26, setting the stage for a Senate trial that will likely supplant stimulus negotiations for the foreseeable future.
But downward price pressure was limited by a series of strong economic-indicator data and a weaker US dollar. US consumer confidence climbed to 89.3 in January, Conference Board data showed, up from a five-month low 87.1 and exceeding market expectations.
Meanwhile, the International Monetary Fund reported that it now expects global GDP to grow 5.5% in 2021, after a 3.5% contraction in 2020. The 2020 figure has been revised up 0.9 percentage point from the previous forecast issued in October, while the 2021 estimate is a 0.3 percentage point upward revision.
Oil prices will average just above $50/b in 2021, a more than 21% rise from 2020's depressed level, as the rollout of vaccines and fiscal stimulus programs will help the global economy post a stronger-than-expected recovery from the pandemic, IMF said.
The ICE US Dollar Index was testing two-week lows at around 90.13 in afternoon trading.
Refined product futures finished the session higher. NYMEX February RBOB settled up 1.96 cents at $1.5807/gal and February ULSD climbed 45 points to $1.5984/gal.
RBOB cracks continued to rally on the back of easing US lockdowns and expectations of tightened supply. The ICE New York Harbor RBOB crack versus Brent climbed to around $10.22/b in afternoon trading, on pace for the highest close since mid-June.
California on Jan. 25 lifted a regional stay-at-home order that affected the vast majority of state residents. New York Governor Andrew Cuomo said Jan. 25 said that the state is planning to ease some restrictions amid a slowdown in new cases.
Analysts surveyed by S&P Global Platts Jan. 25 expected a 1.2 million-barrel build in US gasoline inventories for the week ended Jan. 22, widening the inventory deficit to the five-year average of US Energy Information Administration data to 2.4%.
