The U.S. Congress is reported to have reached an agreement over the oil embargo. In particular, the legislators allowed U.S. oil companies to export crude oil along with letting the U.S. government and public agencies to get more financing to sustain themselves, Masterforex-V Academy reports.
As you probably know, the current financing of the American government is going to end tomorrow. That is why public financing was a major issue requiring a short-term temporary resolution before working out a package of measures aimed at finding he ways and means to allocate finances for 2016. It seems like the oil embargo was canceled as a solution to attract more money from outside. They say there were some taxation changes.
As you probably know, the Republicans are dominating both cambers of the Congress. Still, they would have found it impossible to adopt the changes but for the Democrats.
Masterforex-V Academy experts say that the cancelation of the oil embargo is nothing but a concession. The thing is that the Democrats approved the bill in exchange for the same favor from the Republicans in the future. For instance, the Democrats want some loyalty from the Republicans when it comes to financing the energy sector and fighting climatic changes. At the same time, the Republicans managed to preserve some tax incentives for U.S. businesses.
Oil Prices Go Down Again
Brent oil (ICE Futures) dropped by 0,4% to $38,31 per barrel yesterday. Over the last 18 months, Brent oil lost over 50% of tis value due to oversupply and China’s economic slowdown. At the same time, WTI oil (NYMEX) dropped by 0,75% to $37,07 per barrel.
It is interesting to note that OPEC says the green light for U.S. oil export is not going affect oil prices a lot. More precisely, they say this is going to be zero effect since the USA is an oil importer rather than exporter. America exports light oils but still may need to import heavier oils.
At this point, the U.S. crude oil inventories are at their all-time highs – 486 million barrels. The existing all-time high was set in April 2015 at 490,9 million barrels. It is interesting to note that due to the so-called shale boom, the USA have doubled its oil production over the last 5 years, mainly at the expense of shale oil.
At the same time, the pace of oil consumption in the USA is still lagging behind the production, which is another reason why the oil inventories are now moving around the all-time highs. During the first week of December, American refineries refined some 16,7 million barrels as opposed to 16,9 million barrels a week before. At the same time, American oil import is growing – 8 million barrels, which is 274 0000 barrels more than in late November. The declining demand and increasing supply made businessmen and politicians promote the idea of canceling the oil embargo, which is what happened not so long ago.
