WTI trading with positive bias in upper-$82.00s as traders await EIA STEO and inventory numbers

• Crude oil markets are trading with a positive bias with WTI in the upper $82.00s.
• Ahead, the EIA’s monthly oil market report and private inventory data are in focus.
• The former could allegedly help the Biden administration decide on a policy response to high energy prices.

It’s been a subdued session thus far for crude oil markets, though by and large the complex has managed to shrug off modest selling pressure in equity markets to trade with a positive bias for most of the session. At present, front-month future contracts for the American benchmark for sweet light crude oil, West Texas Intermediary or WTI, trade higher by about 75 cents on the session in the upper-$82.00s. Some commodity strategists said that the recent easing of US travel restrictions (fully vaccinated passengers are now free to enter the US without having to quarantine) ought to give jet fuel demand a boost and help global oil demand recover back to pre-pandemic levels above 100M barrels per day.

Since the start of the week, crude prices have stayed within about 75 cents either side of the 21-day moving average, which currently resides at $82.32. The much more subdued trading conditions this week stand in stark contrast to the volatility seen last week. WTI prices dropped from weekly highs just under $85.00 last Monday to under $78.50 by Thursday, before surging back to the mid-$81.00s by the Friday close.

Coming up

Key themes that could trigger a return of volatile trading conditions include the much-anticipated announcement from the Biden administration on what its response to high crude oil and gas prices will be. Some think the administration may choose to release reserves from the Strategic Petroleum Reserve, though an energy export ban has also been touted.

Some analysts have suggested that the Biden administration will want to see the latest US Energy Information Agency monthly oil market report (called the Short-term Energy Outlook or STEO) before making any final decisions. The report, due for release at 1700GMT on Tuesday, may thus garner more attention than usual. Various news reports have suggested that a final decision on the Biden administration’s response to high energy costs will be announced before the end of the week. Elsewhere, crude oil traders will be watching out for the release of weekly private API crude oil inventory data at 2130GMT ahead of official US inventory data out at 1530GMT on Wednesday.