- WTI is trading slightly lower this morning, after eight consecutive days of gains
- Yesterday, the EIA reported a draw of -6645 MBbls in U.S. crude-oil inventories for the week ending 2/5/2021, in contrasts with the average estimate of -177 MBbls, as reported by Bloomberg
- Crude prices spike in the Bakken region as DAPL's future remains uncertain, and freeze-offs cause production to be shut-in
- Crude prices in North Dakota's Bakken shale region have spiked as weather causes supply shut-ins, and uncertainty surrounds the fate of the Dakota Access Pipeline (Reuters)
- North Dakota is the second-largest oil-producing state in the U.S., with an average output rate of around 1.2 MMBbl/d. Still, production in the state is down around 20% from its high of 1.5 MMBbl/d reached in 2019
- Crude prices have been impacted by weather as freeze-offs have forced producers to halt activity, reducing supply, and supporting price regional prices
- Though Biden has not taken an official stance or position on the pipeline. If the pipeline is taken out of service, crude would still find its way out of the region through other more expensive forms of transportation, most-likely crude-by-rail. If more crude is moved by rail then Bakken differentials would likely tighten
- Global oil supply still outpaces demand due to persistent COVID-19 lockdowns and the spread of variants, according to the IEA
- The agency said, "With demand forecast to rise strongly and still modest growth in non-OPEC supply expected, a rapid stock draw is anticipated during the second half of the year."
- A more optimistic outlook for global GDP by the International Monetary Fund, and a more robust recovery in the united states helped offset the relatively slow rollout of the vaccine in Europe