Did you find any Chinese bonds in your stockings? Nothing says holidays like a big stimulus package from China.
Whether you are working or celebrating Boxing Day, whatever that is, oil is getting a boost from talk of a massive amount of economic stimulus from China.
Reuters is reporting that China is planning to sell a record 3 trillion Yuan ($411 billion) of special treasury bonds in 2025.
They are looking to use the cash to make investments in key technology and advanced manufacturing sectors. China is also adding consumption subsidies and business upgrade assistance
That means investments in artificial intelligence and data centers. That means a lot of energy demand which we’ll probably be powered mainly by coal and natural gas and good old-fashioned oil.
China is also adding consumption subsidies and business upgrade assistance.
Oh, sure you can look at the fact that we saw oil supplies tightening once again and the oil glut that some were predicting is turning into a very tight physical market.
As most folks were travelling to their holiday destinations, the American Petroleum Institute (API) reported a 3.2 million barrels drop in crude oil inventories.
Distillate inventories, which include diesel and heating oil—fell by about 2.5 million barrels and we did see gasoline inventories jump by 3.9 million barrels to get prepared for what iss supposed to be a record-breaking Christmas travel week.
Today, we got the Energy Information Administration version of the ‘Petroleum Status Report' at 10:00.
I was delayed of course because of the Christmas holiday.
But one of the things we must focus on is the fact that inventories are getting very tight, that is why the hedge funds have flipped to the long side of the market.
Hedge funds are being enticed to the wrong side of the market because the reality of tight supplies can no longer be ignored.
We must go back and talk about all these predictions of an oil glut that weighed on prices. It's obvious now that it is not happening.
The market has been rather subdued when it comes to geopolitical risk factors. It’s very clear that we have a supply deficit based upon the weekly data it also means that if a geopolitical disruption happens, we could get a major price spike. The Iranian Tasnim News Agency, affiliated with the Iranian Revolutionary Guard Corps, admits that at least 80 of Iran’s 600 power plants are currently not operating due to a lack of natural gas to manage them.
Energy demand in the future is going to be critical for the economy of the next century.
Meeting the strong demand from data centers and artificial intelligence is going to be key. Countries that face that reality are going to be very successful.
Zerohedge is reporting that “in a bold move to transform Argentina into a global energy powerhouse, President Javier Milei introduced the “Argentine Nuclear Plan” on Friday, with the goal of harnessing nuclear energy as a core component of the nation’s future. The plan outlines the construction of Small Modular Reactors (SMRs), compact nuclear units designed to provide power to commercial sectors and other large-scale operations.
Interfax is reporting that diesel fuel shipments to Russia’s domestic market grew by almost 6% in 2024, while gasoline shipments rose 2%. Commenting on how the temporary ban on gasoline exports affected the country’s fuel market, a ministry spokesman said it “made it possible to additionally sate the domestic market with supply and prevent spikes in both retail and wholesale prices.”
“Targeted use of restrictive measures makes it possible to manually find a balance between supplying the market and utilizing oil refining capacity. Amid the saturation of the market and need to maintain oil refinery capacity utilization in the winter season, a decision was made to lift the ban on gasoline exports for producers. However, for non-producers the ban remains in effect until the end of January 2025. This measure makes it possible to support oil refining without risks for domestic market supply,” the spokesman said.
Deputy Prime Minister Alexander Novak said earlier that the authorities expect to forego the use of tools such as oil product export restrictions in future. “I’m confident that we will use instruments such as banning or opening shipment for export less. This is, after all, quite a non-market instrument. Given sufficient gasoline production, we will use market instruments,” he said. Novak recalled that new gasoline production capacity will go into operation in Russia in the next few years and this will make it possible to balance the situation on the market. Until then, new restrictions could be imposed. “Everything depends on the market situation,” he said.
Natural gas prices after a big spike have pulled back a little bit and we’re continuing to get mixed predictions about the weather in January.
Fox Weather is reporting that “As millions begin the trek home from the Christmas holiday, they’ll be dealing with wet conditions to close out the week with rain and thunderstorms expected across a good swath of the country.
Meanwhile, snow levels are dropping in the West as more storms hammer the coast and dump heavy rain that could lead to flooding in some spots. The storm is expected to bring the first round of rain and thunderstorms to the South on Christmas Eve and Christmas Day before rapidly dissipating on Thursday. However, right on its heels, a new storm will come out of the Rockies and into the southern Plains, bringing a renewed round of rain and thunderstorms, according to the FOX Forecast Center.
The Wall Street Journal is reporting that “America’s Big Natural-Gas Footprint Is About to Get Even Bigger”
“Drillers are looking ahead to new export hubs and easier regulations under the coming Trump presidency”
The articles starts by saying that “Toby Rice, who leads one of America’s largest natural-gas producers, says the “Drill, Baby, Drill” mantra that resurfaced during the presidential campaign is passé. Now, it is all about “Build, Baby, Build.”
Natural-gas investors are looking ahead to potential growth after a year in which historically low prices dinged profits and drilling plans. At the same time, the Biden administration questioned the benefits of making the U.S. liquefied-natural-gas-export machine—the world’s biggest—even bigger.
As climate advocates have increasingly warned of planet-warming emissions, President Biden has ramped up environmental rules and directed unprecedented sums into clean energy, rarely discussing record oil-and-gas output.
Now, with President-elect Donald Trump set to take office, climate concerns are out. New LNG hubs are slated to come online. The White House-in-waiting has promised to fast-track future infrastructure that could help gas companies funnel fuel to new buyers at home or abroad—potentially locking in another era of development.
“Political force has overwhelmed market forces,” said Rice, chief executive of Pittsburgh-based EQT (ST:EQTAB), which produces gobs of gas in the Marcellus Shale stretching across Appalachia. “Let market forces work.”
The U.S. natural-gas market has been constrained in recent years by public aversion to new pipelines and an arduous permitting process that Washington has tried and failed to overhaul. Rice, who recently visited Capitol Hill to talk up natural gas, says this Congress could be different.