Price Of Oil Rises As Iran Possibly Halts Exports To Some EU Countries

A government shutdown that lasts only a few weeks should have limited impact on the operations of oil and gas companies, such as drilling, plant construction, and other ongoing operations. A longer-term shutdown could be more debilitating, delaying progress on regulatory requirements, such as new permits, or environmental impact studies.

Short-term impacts could be much more pronounced for energy traders, who rely heavily on regular information reports issued by government agencies.

“The extent to which commodity markets rely on federal data is hard to exaggerate. Weekly and monthly data on energy supplies, demand and stocks from the EIA regularly move derivative prices and provide some of the most important real-time context for oil markets worldwide,” writes John Kemp in a Reuters column.

“Markets thrive on hard data – as well as rumours, speculation and differences of opinion. An information vacuum will tilt the balance between market participants in ways which could sharply reduce trading volumes.”

Kemp writes that the CFTC will not publish Commitment of Traders and other market reports, “depriving participants in the world’s biggest derivative markets for energy and agricultural products of price-moving information about the positions of other producers, consumers and speculators”.

He adds that while the EIA has enough funding to continue publishing weekly data for several more days,  “the agency’s funding will run out around October 11, according to officials, at which point publication will have to cease.”