The drifting and listless oil futures market reversed course yesterday and rallied back above $75 after a report that President Trump is not “just blustering” on tariffs. I think that means he is serious and that is what Canadian politician Chrystia Freeland, who wants to replace Canadian Prime Minister Justin Trudeau is saying as some of my Canadian friends are taking offense at President Donald Trump’s real and impending tariffs on Canadian goods. Christian is raising the put Canada first spirit, raising the Patrick spirit ire of Canadians by telling Canadians they need to stand up against President Trump.
Ms. Freeland said that “I would say for President Trump, weakness is a provocation. I think capitulation is not a negotiating strategy with him.” She said that Canada should place counter-tariffs on US imports and proposed to have an international summit of countries targeted by President Trump.
Bloomberg News reported that “Freeland said she believes Trump is very smart, has a clear world view, and is threatening to impose huge tariffs on Canada, Mexico and other allies in part to pave the way for tougher policies on China.
“He has come to the conclusion that if he can show the rest of the world how mean and tough he can be with his closest partners and allies — how much he’s prepared to beat up on those really nice Canadians, who throughout history have been great partners for the U.S. — how do you think that’s going to make the Chinese feel?” she said in an interview with Bloomberg News.
Wait! WHO said Canadians were nice?? Just kidding! Canadians are very nice, Most of them anyway. Besides Canada makes it almost impossible for US commodity Brokerages to deal with Canadian Clients. They have protectionism built in to favor Canadian brokerages. I have many Canadian followers who want to open an account with me but can’t because of the protectionist measures by the Canadian government. Free Canada from America brokerage suppression! Do you hear the people sing?
And there is no doubt that the emotions of Canadians are being riled up by these sanctions’ threats. Just read this letter I received from one of my former loyal Canadian readers.
He wrote “Canada has 1/10th the US population yet almost buys as many goods as possible from the US that the US buys from Canada. That means the average Canadian buys 10 times the amount of American goods that an American buys of Canadian goods, yet your nation is trying to squash mine.
How do average Americans sleep at night with this type of aggression against friends? I will be unsubscribing to your commentary after more than 10 years of reading it. Good luck, I hope your president's moves don't push everyone to a decision to reduce their reliance on the USD to limit the power of America when they try to finance their debts and let the House of Cards start to collapse. Thx for the commentary but I cannot support anything American anymore. “
Wow after a decade of reading mt report. I know I shouldn’t feel this way, but I kind of feel honored to be your thought highly enough to be boycotted by some Canadians.
But regardless of The Energy Report boycott by this one Canadian, I will continue to call it as I see it! Free Canada!
February 2nd is TT-Day (Trump Tarif Day) and the Trump Administration is saying that sanctions will go through and unless there is a last-minute deal get ready to pay a little bit more for oil.
In the meantime, it’s going to be about the Federal Reserve today.
Yesterday the oil inventories according to the American Petroleum Institute were pretty much in line with expectations with a big drawdown in distillate inventories that should not be a surprise after the cold temperatures.
The API reported that crude supplies rose by 2.86 million barrels last week. We saw a slight drop in Cushing OK of 144,000 barrels.
Gasoline inventories increased by 1.89 million barrels probably because people stayed home, and I don’t blame them and distillates down 3.75 million barrels.
The International Energy Agency made a comment about the “DeepSeek” threat exposing guesswork on AI power demand.
The key things of course about this technology could change the long-term outlook for power demand and maybe reduce some of the expectations.
That we’re going to have to build more nuclear power plants and coal to power these data centers and while it’s still too early to figure out the impact there’s no doubt that the markets starting to make some adjustments, but one energy major is moving ahead with plans.
Reuters is reporting that Chevron, signed an agreement with investment firm Engine No. 1 and GE Vernova (GEV.N), opening a new tab to build natural gas-based power plants to run co-located data centers in the U.S. The announcement comes just a week after U.S. President Donald Trump revealed a private sector investment of up to $500 billion to fund infrastructure for artificial intelligence, aiming to outpace rival nations in the critical technology.”
Reuters also is reporting that U.S. officials are looking at the national security implications of the Chinese artificial intelligence app DeepSeek, White House press secretary Karoline Leavitt said on Tuesday, while President Donald Trump’s crypto czar said it was possible that intellectual property theft could have been at play. The National Security Council is reviewing the app’s implications, Leavitt said. “This is a wake-up call to the American AI industry,” she added, echoing Trump’s comments from a day earlier while also saying the White House was working to “ensure American AI dominance.”
As we said yesterday will is going to be in a bit of a trading range anything in the $70.00 handle definitely should be bought though we see strong support somewhere around 71 resistance is definitely at 75 if we can close above 75 we’re probably headed back up to 80 but in the meantime get ready for home, home on the trading range.
Natural gas backed off as weather reports warmed up the fox weather channel is suggesting that we could see some warm temperatures in Europe the cold start to the winter is going to make energy more expensive not only this winter but next winter
John Kemp at Kemp Energies reported… EUROPE’s summer-winter gas calendar spread has marched deeper into backwardation as traders anticipate the region will have to pay much higher prices to refill storage in the summer of 2025 than it did in the summers of 2024 and 2023. The winter has been colder and less windy than the two previous winters, resulting in a faster depletion of gas inventories, and leaving the region needing to buy more gas this summer. Futures prices for gas delivered in the summer of 2025 are trading at a premium of more than €5 per megawatt-hour over futures for winter 2025/26, up from less than €1 three months ago.
In the US EBW Analytics reported that natural gas collapsed over the weekend as bearish weather shifts slashed 37 gHDDs and post-Enzo production returned rapidly dashing fundamentally dubious hopes for the February contract to linger above $4.00/MMBtu.
The March contract is off 32.8¢ (-10%) since Friday and could test south of $3.00/MMBtu in the coming days. Still, a colossal storage draw Thursday and the largest storage deficit to five-year norms since 2022 offer near-term support.
While the acute re-pricing of NYMEX futures pulls prices into better alignment with underlying fundamentals, medium-term declines remain favored. Nearly half of winter is still ahead. Still, record seasonal production and soft spring demand may offer a deeper test of support over the next 60-90 days. The longer-term outlook into summer 2025 and beyond is supportive, however.