Oil Futures Fade Gains as Biden's Stimulus Up for Debate
WASHINGTON, D.C. (DTN) -- With equities resetting record highs on Wednesday,
crude and refined products futures on the New York Mercantile Exchange and
Brent contact on the Intercontinental Exchange remained on the offensive in
afternoon trade although backed off the intrasession highs after several U.S.
lawmakers indicated their opposition to the new spending plan proposed by the
incoming administration of Joe Biden, who today was sworn in as the 46th
president of the United States.
West Texas Intermediate futures for February delivery expired near an
11-month spot high $53.24 bbl, with the March contract settling 33cts higher at
$53.31 bbl. March Brent contract on ICE added 18cts to finish just above $56
bbl at $56.08 bbl. NYMEX February ULSD futures settled modestly higher at
$1.6004 gallon and February RBOB futures added 0.58cts for a $1.5439 gallon
Wednesday's modest gains were spurred by investor expectations for U.S.
crude stockpiles to decline for the sixth consecutive week through Jan. 15,
down 1.3 million bbl from the previous week. Gasoline inventories projected to
have risen by 2.1 million bbl from the previous week, while stocks of
distillates are seen to have added 1.1 million bbl. Refinery run rates likely
declined by 0.5% to 81.5% of capacity.
The closely watched inventory data from the American Petroleum Institute is
scheduled for release at 4:30 PM ET, with the weekly report from the U.S.
Energy Information Administration delayed to 11 AM ET Friday due to
Biden assumed the presidency today amid economic turmoil brought on by the
pandemic and government response to slowing the spread of the virus that
continues to affect millions of American businesses and households. Biden's
signature legislature to spur economic growth is centered around his plan for a
$1.9 trillion in rescue aid designed to deliver direct payment checks to
Americans and boost government efforts to flatten the curve. It became clear
however, the new spending plan is likely to go through vigorous debate on the
Senate floor as several Republican lawmakers suggested they opposed the
legislation. Senators Mitt Romney (R-Utah) said Wednesday he is "not looking
for a new program in the immediate future," while Lisa Murkowski (R-Alaska)
indicated the plan requires a "fair amount of debate." It might be tough for
Romney or Murkowski to vote against a bill that also includes pandemic and
vaccine funding, however.
United States passed a grim milestone of 400,000 virus-related deaths on
Tuesday, with the toll on human life projected to rise further in coming weeks
before leveling off mid-February. The long-awaited vaccine rollout has so far
been slower-than-expected, prompting top health officials to criticize the
disorganized campaign. Biden plans to broaden the federal government's role to
achieve nationwide immunization targets, setting up federal sites for mass
distribution, along with mobile vaccination centers for people in rural areas.
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