Nvidia reports earnings after the bell today, and there’s a lot riding on the results – bullish bets, energy consumption, the future of the human race (too much?).
But oil has a more traditional balance to strike – fundamentals of an oversupplied market vs the potential supply (and price) shocks that geopolitical risk brings to the market.
EIA crude oil inventory data is due out later today.
~Doug
What’s in this issue:
- Energy Market Recap
- Signs of Life in China?
- Headlines
| Crude Oil (Dec) | $69.39 | +0.23 | +0.33% |
| Natural Gas (Dec) | $2.998 | +0.025 | +0.84% |
| Copper (Dec) | $4.1420 | +0.0220 | +0.53% |
| S&P 500 | 5,916.98 | +23.36 | +0.40% |
Energy Markets 🛢️Oil prices held on to Monday’s gains and tacked on another small gain of .3%. Gains are largely underpinned by geopolitical activities with the fallout of Ukraine using US-supplied missiles to strike assets within Russian territory is still to be determined. +Explainer: What happens when Russian gas to Europe via Ukraine stops? – Reuters A deteriorating fundamental situation seems to be capping gains for now. On the fundamental side, TD Securities notes: “With China finding it difficult to get back on a growth trajectory north of 5% and the U.S. and Europe undergoing a cyclical slowdown, crude oil demand in 2024 and 2025 is set to grow at barely half of the 2 million b/d pace seen over the 2022-2023 post-pandemic period,” Spreads: We mentioned yesterday that the front WTI spread was just barely in contango with the Dec contract settling below Jan, and that spread deepened yesterday: Dec / Jan : -0.25 🔥Natural gas added to Monday’s strong gains and settled just shy of the $3 mark. Prices hit a high of $3.058.Weather demand should begin to pick up which may send prices back above $3. In the short run, that would be a supportive break of technical resistance. In the long run, the question is at what price does stalled production come back online. |
| PRESENTED BY ENERGY 101 The Course I Wish I Had  This is me, Doug Stetzer, your daily newsletter writer. Yours truly. Not some bot, AI image, or stock photo.There was a time, however, when those grays were darker and I was just starting of on the overnight NYMEX Access desk at ED&F Man. Anyone remember those days? When I ended up working with my father (yep, we’re a family business) to build our e-learning courses, I thought to myself, “I wish I had that when I was starting out.” I was on the phone all night with oil and gas traders and I didn’t have a clue what I was talking about. That’s exactly why companies use our Energy 101 courses to get their new hires in energy, finance, sales, IT and other support functions up to speed – so they can talk the talk, feel like part of the team, and contribute to their fullest potential. Whether it’s just you, the occasional new hire, or groups of 10 or 100+, our training solution customizes and scales to fit your needs. Hit reply and let’s connect. Learn More About How We Work With Teams Like Yours Today → |
| Signs of Life?There are some signs of life coming out of China with retail sales data beating expectations. Considering the effect gloomy data has had on the oil market, any sign of a turnaround here will be closely watched. But it’s probably too soon to tell. China held rates steady as expected. Rate cuts in October and moves to stabilize regional banks may be contributing to some short-term growth. However, the actions are largely seen as lacking the fiscal stimulus necessary to turn things around in the long term. Pain in the real estate market continues to drag on the economy with property investment falling 10.3% and new construction sliding 22.6% in the first 10 months of the year. |
| Headlines “We have had a good run up. But the other story is that maybe the executives are expecting revisions in equity prices.” +Corporate insiders cash in on post-election US stock market surge – FT “The plans represent part of a hardening stance from Europe towards China as it seeks to protect companies in the bloc — subject to strict environmental regulations — from being undercut by cheap and more polluting imports.” +EU to demand technology transfers from Chinese companies – FT “We do not foresee adding to (our) backlog without substantially different industry economics than what we see in the marketplace today,” +Global offshore wind industry poised to miss big targets as obstacles mount – Reuters ”Increased consolidation among oil and gas producers and hurdles in getting new energy infrastructure approved and built have made the U.S. pipeline and storage sector attractive for deals.” +DT Midstream to buy three natgas pipelines from ONEOK for $1.2 bln – Reuters |
| Economic Calendar Monday – Tuesday – Housing starts Wednesday – Weekly Crude Oil Storage Report, Nvidia reports Thursday – Weekly Natural Gas Storage Report, Jobless claims, Home sales Friday – Rig Count, PMI |
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