Fueling Strategy: Please “FUEL AS NEEDED TODAY/TONIGHT”, Prices are DOWN 4 Cents  TODAY, Thursday look for a small bump of 1/2 cent~ Be Safe Today!

NYEX Crude      $  68.77 DN $.1700

NYMEX ULSD     $2.2404 UP $.0051

NYMEX Gas       $1.9918 DN $.0087

NEWS

The January WTI  trading session settled at 68.77 (-0.17) [-0.25%], a high of 70.30, a low of 68.05. Cash price is at 68.96 (-2.27), while open interest for CLF25 is at 346,924. CLF25 settled below its 5 day (69.54), below its 20 day (69.39), below its 50 day (69.90), below its 100 day (71.21), below its 200 day (73.55) and below its year-to-date (73.26) moving averages. The COT report (Futures and Options Summary) as of 11/19 showed commercials with a net short position of -228,299 (a increase in long positions by +7,119 from the previous week) and non-commercials who are net long +219,154 (a increase in long positions by +7,454 from the previous week). 

In a televised address Israel’s Prime Minister Benjamin Netanyahu recommended that his cabinet approve the American and France backed ceasefire agreement with Lebanon’s Hezbollah, and just a few hours later, the cabinet approved the deal. Regarding Hezbollah’s benefactor Iran, Netanyahu did say that “The ceasefire allows us to focus on the Iranian threat”. From the White House President Biden said, “Under the deal reached today, effective at 4:00 a.m. tomorrow, local time, the fighting across the Lebanese Israeli border will end,” adding that “This is designed to be a permanent” ceasefire, and that Lebanon had officially agreed with the deal.

Yesterday, Donald Trump announced on his Truth Social platform that, upon taking office, one of his first executive orders will be to impose a 25% tariff on all products imported from Mexico and Canada, as well as an additional 10% tariff on goods from China. Not yet set in stone of course, but this could drastically affect Canadian oil and natural gas imports. Per Bloomberg, the U.S. imports roughly 4 million barrels per day from Canada, and accounts for more than half of America’s total yearly imports, while the U.S. accounts for about a third of Canada’s total crude oil exports. If this does come to pass, I think you could expect to see energy prices rise across the board. The U.S. Dollar Index closed higher by +0.08% and the three major stock indexes all closed higher.

Exxon Mobil’s President Liam Mallon commented on Trump’s proposed American energy production increase, saying he does not foresee a major production increase via the administration’s incoming policy changes. Specifically citing that Texas, the largest energy producer in the country, is still a private state.

According to newly released Energy Information Administration (EIA) data the U.S. set a new all-time record for crude oil production in August of this year, averaging 13.4 million barrels per day. This is about 100,000 barrels per day higher than the previous record set in December 2023.

Reuters put out an exclusive story yesterday stating Trump’s transition team is putting together a large and sweeping energy package that Trump’s team plans to implement within days after his induction. According to Reuters the two sources say the plan would approve export permits for LNG and increase oil drilling on federal lands and the U.S. coast, as well as officially approve the Keystone Pipeline. According to federal data, oil production on federal lands and the U.S. coast hit all-time highs in 2023, with drilling on federal lands and waters accounting for about a quarter of U.S. oil production.

Weather forecasts for this week predict winter temperatures across the Upper Midwest and East-Coast here in the states. Travel Group AAA predicts up to 80 million Americans will be traveling for the Thanksgiving holiday this week, the 80 million figure is a 1.3 million increase compared to last year. The Transportation Security Administration (TSA) said last week it expects this Thanksgiving to be the busiest Thanksgiving travel period on record, with an estimated 18.3 million people being screened in airports, which is a 6% increase over last year.

Now that Donald Trump has been elected President, we believe he’ll fulfill his promise to “Drill baby, drill”, significantly increasing the output capacity for American energy, passing executive orders as soon as day one in office. Keep in mind that the U.S. currently produces 13.5 million barrels of oil per day, a figure that’s nearly 30% higher than it was just four years ago. Over the past 50 years, U.S. energy production has grown at a faster rate than consumption, and since 2019, America has been a net energy exporter. We shall see where that “million barrels per day” number goes after Trump is sworn in. Drastically increasing American energy output could create an interesting market share conflict with the OPEC+ nations, but that’s another story, potentially down the line.Then there’s China, how much stimulus they choose to add to bolster their economy could determine crude prices significantly in the short and long term, we believe, and we’ll have to wait and see the impact Trump’s tariffs have. And then there’s the Middle East situation, which could simmer or explode, and even if the violence ends I believe we’ll see new economic sanctions on Iran. With the prevailing themes of a stronger dollar, potential trade wars, increasing supply, slowing economies and a lack of global demand front running price sentiment, it leads me to believe in 2025 crude oil prices will not end up averaging in the $85-$95 range, rather I see crude prices trading in the low $60’s to middle $70’s range, for long as there’s no black swan events.

Have a Great Day!

Loren R Bailey, President

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Cell: 479-790-5581

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