Energy Prospectus

Strength in the crude crack spread is bullish for crude prices after the crack spread today climbed to a 5-week high, encouraging refiners to boost their crude purchases and refine the crude into gasoline and distillates.

Signs of strong US jet fuel demand support crude prices after the EIA reported US Oct jet fuel demand rose +1.9% y/y to 1.73 million bpd, the highest monthly level in 7 years.

The outlook for new sanctions on Iranian and Russian crude exports could limit global oil supplies and is bullish for prices. Mike Walz, President-elect Trump's pick for national security adviser, vowed a return to "maximum pressure" on Iran, and the Biden administration said it is considering new, harsher sanctions on Russian crude oil.

Note below from Keith Kohl 1-2-2025

When Trump fired off his latest tariff threats against the EU, it came with a promise that Europe will have to buy more oil and gas from the United States. Before you start worrying about a trade war, I want you to keep in mind that it’s essentially an empty threat — not because Trump won’t slap tariffs on EU members, but rather because he won’t have to.

If I were to ask you where most of our oil exports wind up, what would your answer be? China? Perhaps India or South Korea?

Although it’s true we ship a little over a million barrels per day to Asian markets, it’s only HALF of what we send to Europe.

Together, just ten EU countries buy up more than half of total U.S. crude oil exports. That’s over two million barrels of crude shipped to these ten countries every single day.

And our largest customer isn’t India, nor is it South Korea — it’s the United Kingdom.

This thirst for U.S. crude will only grow over the next few years as Europe seizes its opportunity to finally replace the Russian oil and gas it had to buy before. European countries like Germany are already building up their infrastructure to allow for more LNG imports.