What the f***?
I have no idea what this is all about. I’m not sure I want to. Probably something to do with crypto. I may have to bust out the Hermès tie I got from the Enron nat gas traders as a Xmas gift one year just to get mentally ready for whatever’s next.
But if you want a refresher on what really happened at Enron and have an hour or three, I highly recommend this deep dive by Acquired:
~Doug
What’s in this issue:
- Energy Market Recap
- Nat Gas: Stocked up, burning fast
- OPEC+, What if they end cuts?
- Headlines
| Crude Oil (Jan) | $68.10 | +0.10 | +0.15% |
| Natural Gas (Jan) | $3.213 | -0.150 | -4.46% |
| Copper (Dec) | $4.0755 | -0.0050 | -0.12% |
| S&P 500 | 6.047.15 | +14.77 | +0.25% |
Energy Markets  Oil prices steadied yesterday after the recent declines from above $71, notching a barely-positive trading session. Economic data out of China is giving the market some glimmer of hope of a revival of the manufacturing sector. Additionally, it’s hard to argue that all geopolitical risk should be removed from the market. SpreadsJan/Feb: +.26   Natural gas prices dropped yesterday on warmer weather forecasts. If you’re scratching your head because you’re pretty sure that prices rallied on Friday because of colder forecasts, you’re not alone. Imagine trading this market for a living! As Gelber & Associates was quoted in the WSJ:“While the recent frigid temperatures were previously expected to persist and possibly even increase, multiple forecasts now call for a lessening of the recent cold” Stocked Up, But Burning Fast The EIA published its latest In-Brief Analysis showing that US natural gas inventories are the highest for this time of year since 2016. But this situation can change fast, as we are seeing in Europe. Analyst John Kemp notes in his latest piece that despite the strong start, we could burn through the excess inventory this winter season. “the combination of falling production, rising consumption by power generators, and growing exports implies the surplus will very likely shrink again even if winter temperatures remain close to the recent average.” |
PRESENTED BY ENERGY 101Get Started, Get Ahead Whether you have an important interview coming up, or are a hiring manager getting a team up to speed, Energy 101 is the course built for you. Our courses are built by industry experts who love to teach, with input from corporate clients on what’s important for their teams.Learn More → |
Can OPEC+ End Cuts? It is widely believed that OPEC+ is stuck. They can’t afford to bring back output that is supporting market prices, yet the same higher prices are enabling higher-cost producers (ie, US shale) to steal market share.“OPEC+ members are holding back 5.86 million barrels per day of output, or about 5.7% of global demand, in a series of steps agreed since 2022 to support the market.” Yet, when they meet on Dec. 5, expectations are that they will agree to continue to push back the eventual ending of production cuts. But what if they don’t? OPEC members aren’t super excited about the current strategy. Angola has left the group and it is suspected that others (Gabon, Equatorial Guinea, Republic of Congo) might follow suit. Plus, “quotas” is a term loosely thrown around, and complied with, in OPEC. Iraq, Kazakhstan, Russia are seen as persistent quota busters.And then there’s the UAE with it’s quota and stated production of 2.9 mm bpd: |
| Headlines “PG&E said it had launched a $1.2 billion common stock offering and a $1.2 billion mandatory convertible preferred stock offering, according to a regulatory filing on Monday.” +PG&E shares fall after launching $2.4 billion equity capital raise – Reuters “failing to achieve any of his goals, the crown prince has concluded that bending the region to his will is not within his power. Instead, he has now turned inward, seeking to ensure stability within the kingdom. Leaning toward Iran is one way of keeping the chaos outside Saudi Arabia’s borders.” +The Real Reason for Saudi Arabia’s Pivot to Iran – ForeignPolicy “The proposed tariffs would affect a wide range of industries, including oil, natural gas, agriculture and manufacturing, potentially altering long-established trade patterns and supply chains.” +How Trump’s proposed tariffs might affect commodities and energy – Reuters “I don’t think Sheinbaum is reading the room,”+The risk of Mexico being shut out of North America is rising – FT “It is the first time Switzerland’s top criminal court will rule on a company’s liability for the alleged bribing of a foreign official and a rare instance of a former top executive of a trading firm going in the dock.” +Swiss corruption case involving Trafigura and former executive opens – Reuters |
| Economic CalendarMonday – ISM, Construction Spending Tuesday – Job Openings Wednesday – ADP Employment, Beige book, Weekly Crude Oil Storage Report, Thursday – Jobless Claims, Weekly Natural Gas Storage Report, OPEC+ Meeting Friday – US Employment Report |
| Get Energized! Was this email forwarded to you? Click here to subscribe and get Energized delivered free to your inbox every weekday morning. |
