Weekly EIA Crude Oil Stocks Spike By 4.351 Million Barrels
Shain Vernier • 1 min read
Due to Monday’s observance of Martin Luther King Jr. Day, the weekly EIA Crude Oil Stocks Report was delayed until this morning. The numbers came in exceedingly positive, measuring a 4.351 million barrel week-over-week increase. At press time (12:00 PM EST), WTI crude oil futures are pricing-in the supply bump and are off nearly 1.5%.
With every new presidential administration, a fresh collection of variables face energy traders. This one is no different, with Joe Biden signing two executive orders that impact the production and transport of U.S. crude oil. Here are Biden’s first moves toward energy:
**Revoked an essential permit for the Keystone XL pipeline. The action essentially stops construction of the pipeline.
**New permits for fracking on federal lands have been placed on a 60-day moratorium. This policy impacts 25% of aggregate U.S. fracking production, specifically in the Arctic National Wildlife Refuge.
Both of these executive orders are not surprising, as each was a component of Biden’s campaign platform. However, they do pose major questions regarding the future of North American energy production and global crude oil supply. If more dramatic steps are taken to move toward a “net-zero” U.S. economy by 2050, WTI and Brent crude oil prices are likely to be all over the board.
Here are the key levels to watch for February WTI crude oil futures next week:
Resistance(1): 2020’s High, $57.68
Support(1): 78% of 2020’s Range, $50.98
Bottom Line: Right now, a bullish bias is warranted for February WTI crude oil. If price pulls back to 2020’s 78% retracement, a buying opportunity may come into play. Until elected, I’ll have buy orders in the queue for February WTI from $51.09. With an initial stop loss at $50.69, this trade produces 40 ticks on a standard 1:1 risk vs reward ratio.