The price of our WTI contract hit a 7-month low last week, as Fox Business reports in the above video. Anthony Grisanti of GRZ Energy rightly tells host Liz Claman some of the reasons for this: an easing of Iran tensions and demand for gasoline is not as high as we thought.
More importantly, Grisanti makes a great point about where the price of WTI is headed. I’ve written here previously about the value that will be added to WTI by the Seaway pipeline, which reversed May 17, and will send more of the oil currently backed up in Cushing, Oklahoma to the Gulf, where it will be refined and made available to world markets more readily. Grisanti says he expects a continued small drop in price before the Seaway effect will push values back up:
Claman: Will (the Seaway reversal) be bullish for prices? Will we start to see prices go back up?
Grisanti: Absolutely it will be. It won’t be overnight because what we’re talking about is 150,000 barrels a day now. It will be 400,000 by the end of the year. You’ll see a slow drawdown of the supplies in Cushing. It makes that oil a lot more valuable, viable.