The crude oil market is caught in an impeachment trap yet a late-breaking story may give oil direction. Saudi Arabia agrees to a partial cease-fire in Yemen.
Still, movement in recent days has been wide, influenced by moves in stocks that generally move up and down as the odds of impeachment go up and down. The whistleblower complaint reportedly was a CIA agent that heard it from a friend who heard it from another, Trumps been messing around. Really?
First Trump had corrupt FBI officials trying to hang a fake Russian investigation on him and now a CIA agent is acting as a spy for the opposition under the guise of a so-called whistleblower. Never before in the history of the United States has a duly elected President been the target of the FBI and the CIA working actively together to try to bring him down. This came after it appeared the door was open for indictments against Andrew McCabe and Jim Comey, among others, in the failed Russian probe. The Impeachment push is still being led by the far-left wing of the Democratic party that has shown its disdain for truth and fairness and the presumption of innocence when it came to the Russian probe and of course the Brett Kavanaugh hearings.
This latest attempt to bring down the President has brought down the oil market as well. The weakness in the stock market lowers demand expectations for energy and raises fears that impeachment of a reversal of Trump’s economic policies will have the U.S. join the rest of the world in slowing growth.
The Pentagon announced that the U.S. will send a Patriot missile battery, radar, and roughly 200 support personnel to Saudi Arabia and that gave oil a bit of a late bounce but it failed to get the higher close that may have solidified the bottom. Overnight more violence in Libya may also give oil support and a report that Iran's Ambassador to Iraq threatened to target U.S. forces in Iraq in case of an attack on Iran. Oil may also see support from reports that the UEA backed warlord Khalifa Haftar is conducting airstrikes in Tripoli.
For the oil market, the filling of the gap and bounce suggests that oil is trying to bottom. Yet the breaking news of the Saudi Partial Ceasefire in Yemen may challenge that low. The U.S. Baker Hughes rig count is still expected to fall yet again as shale producers are in pullback mode. If the stock market shakes off the impeachment assault, we should soon rebound higher.
Gas met it Waterloo in the form of the weekly EIA report. In a major blow to Natural gas bulls, the EIA reported that working gas in storage was 3,205 Bcf as of Friday, September 20, 2019, according to EIA estimates. This represents a net increase of 102 Bcf from the previous week. Stocks were 444 Bcf higher than last year at this time and 47 Bcf below the five-year average of 3,252 Bcf. At 3,205 Bcf, total working gas is within the five-year historical range. Of Course, an early Arctic blast in the Northwest may give the bulls some hope.