The Daily Dose; Mind the data

-US data may be skewed by federal events

-Lack of pipelines could strand North American crude

Crude oil prices drifted lower in Tuesday, shrugging off early concerns over reports of an explosion in Saudi Arabia. The market could be idled in anticipation of US data on crude oil and product inventories, though that data may be a bit misleading. Further on the horizon, we wonder about North American crude oil given the new rush to thwart pipeline development in the country.

Market volatility has cooled considerably since Joe Biden assumed the presidency in the United States, a sign that investors are looking to cooler heads to prevail over US legislation. The price for Brent crude oil was more or less static at 3 p.m. ET, trading at $55.58 per barrel.

Several news outlets reported early Tuesday that an explosion of some sort rocked the Saudi capital, Riyadh. That followed weekend claims that Saudi air defense systems had intercepted rocket fire from the Houthi group in Yemen, which draws support from Riyadh’s arch foe Iran. The Houthi group had claimed responsibility for attacks on Saudi Arabia’s oil infrastructure, attacks that caused a brief, but major, spike in crude oil prices in September. The trajectory of the strike, however, suggested the attack came from Iran.

Elsewhere, S&P Global Platts in a note emailed to The GERM Report said it expected the federal government to show gasoline inventories increased by 1.2 million barrels during the week ending Jan. 22. Oil inventories could show a 1.7 million barrel decline and distillates, which include diesel, could draw by around 700,000 barrels. That data, however, could be skewed by events on the political calendar last week. The federal government was closed Jan. 18 to pay respect to civil rights leader Martin Luther King, Jr., while the EIA opted to delay its data release to Friday because of the swearing-in ceremony for now President Joe Biden.

Biden, meanwhile, continues to push his green agenda a forward, an agenda that could be facilitated by the slight edge for Democrats in both chambers of Congress. Biden already axed the Keystone XL oil pipeline and the administration threw up roadblocks Tuesday to the Dakota Access pipeline. While the latter could be viewed primarily as an export pipeline for Canadian crude, both could lead to transit issues in North America. Both U.S. and Canadian benchmarks could fall out of favor for simple reasons of accessibility.

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