The U.S. Congress is on the verge of approving several bills concerning pubic spending and taxation. The bills include the decision to cancel the embargo on the export of crude oil that has been valid for 40 years. Obama’s administration promised to put a veto on this decision however the package includes a bill aimed at backing green energy and environment protection supported by President Obama. This leads us to believe that the bills may be approved.
This may happen by Wednesday. Last week, the Congress approved short-term financing up until the day. But for the decision, public agencies may have suspended their work because of the absence of financing due to no decision on higher credit ceiling and budget spending.
Meanwhile, the Congress is still at odds over the issue and the congressmen keep on looking for a compromise, which is why there is no 100% guarantee that the embargo is going to be canceled this time. Apparently, U.S. oil companies are lobbying the idea to cancel the embargo. They hope that this measure will help them to boost their supplies and income from selling oil. At the same time, U.S. oil refineries are against the idea since they are afraid that this may result in higher gasoline prices due to lower oil supplies and inventories inside the USA. The shale revolution boosted oil production by 90% relative to August 2008, backing the lowest gasoline prices since August 2009. As for the EIA’s forecast, the average gasoline price in 2016 is expected to be slightly over $0,6 per litre.
On Friday, WTI oil lost 3.1% to touch $35,62/b. Brent oil lost 4.5% to see $37,93/b. Today, oil is trading around $35/b, which is confirmed by the chart below, courtesy of Masterforex-V Academy.
