That pipeline will not ship its capacity of 400,000 barrels per day because it cannot do so, operators said. But strong generation in the U.S., the globe's largest consumer of the energy commodity, has prompted rail routes to compensate for the pipeline's shortfall.
"Seaway isn't going to reach full capacity when people were expecting," chief market strategist Bill O'Grady with Confluence Investment Management in St. Louis told the news source on Tuesday. "Other routes have been developed to make up for the delayed start of the line. When there's an arbitrage this big, the market is going to find ways to profit from it."
At 11:47 a.m. on Tuesday, WTI crude oil futures fell 0.07 percent, a 7-cent loss to $95.79 per barrel. At 11:48 a.m., Brent crude oil futures fell 0.42 percent, a 49-cent loss to $116.89 per barrel.
The Wall Street Journal reports crude oil futures are hinging on economic data regarding supplies after U.S. markets were closed on Monday for the observance of Presidents' Day and markets in China were closed last week for observance of the Lunar New Year.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.