Stirring The Pot. The Energy Report 11/29/2024

Oil prices are back on the rise as Russian President Vladimir Putin suggests that Biden is stirring the pot to make it harder for President Trump to achieve peace and stop the killing in the Russian-Ukraine War.

At the same time oil is looking at the fact that the Bided brokered cease fire between Israel and Hezbollah might be falling apart as both sides are accusing the other of a cease fire. On the bearish side OPEC plus has delayed their Dec 1st meeting until December 5th as a deal to extend production cuts remains elusive. Natural gas is bouncing back as winter is coming early and Europe could be facing the energy crisis that they have avoided in the last few years because mother nature gave them a break.

It is almost unbelievable that an American President, like Biden would be so irresponsible as to try to flame the winds of war to complicate things for his predecessor. Yet by Biden upping the ante, allowing Ukraine to use US supplied missiles and US landmines after he lost the election. In fact, Russian President Vladimir Putin says he absolutely believes that the Biden administration is trying to create difficulties for Trump with Russia. And I can understand how he might believe that. Biden’s main policy is to do everything the opposite of President Trump. To get inside the mind of Biden, you must think like George Constanza. Every decision he’s made over the last 50 years has been wrong so that if he does the opposite of what President Trump does, he will somehow be right. Sadly, the opposite is true.

The New York Times reports that, “Russia, Targeting Ukraine’s Grid, Moves to Cut Off Its Nuclear Plants Moscow has increasingly hit critical substations linked to nuclear power plants in an effort to disconnect them. The assaults risk a disaster, experts said.”

Biden’s ‘go weak’ policies on Iran have had devastating consequences for world peace. So, it is interesting to note that as the New York Times reports that Iran had planed to attack Israel but changed their mind after President Trump was elected in a landslide. That is just more evidence that when you deal with a rouge regime like Iran the key to peace is strength not appeasement.

That brings us to the OPEC meeting delay. Now while the OPEC cartel gives an excuse that the meeting was delayed not because they couldn’t come to an agreement but because of some conflicts with another meeting that members had to attend. The reality is that underneath solidarity there is some dissension in the ranks. There were many producers that want to unleash more supply onto the markets. The United Arab Emirates, Kazakhstan and Iraq are countries that have shown some restraint in recent months, there are more concerns that patience is wearing thin. That might make it harder to show solidarity at the delayed meeting.

The Europe Energy Crisis is reappearing as winter is coming hard and fast. John Kemp at Reuters reports that, “Europe’s gas inventories have depleted at the fastest rate for eight years, as the region has experienced repeated bouts of colder-than-normal temperatures and low wind speeds since the start of the winter heating season. Combined inventories in underground storage across the European Union and the United Kingdom dropped by 83 terawatt-hours (TWh) between the official start of winter on October 1 and November 26. Stocks have fallen more than four times faster than the average over the last ten years, and by the most for any year since 2016, according to data from operators compiled by Gas Infrastructure Europe (GIE).

And wind power is letting them down. Kemp reports that Great Britain’s electricity transmission system has relied on gas to supply around 45% of generation so far in November, as colder-than-normal temperatures have sent demand surging while slow wind speeds have trimmed wind farm output.

Because the oil market failed to crash before Thanksgiving, it looks more like we could be putting in a bottom. Geopolitical risk factors and weather favor the upside. Natural gas prices also seem to be solid after the weather forecast predicts a colder than normal winter. If that’s the case, it looks like the bottom for energies may be in.

Make sure you stay tuned to the Fox Business Network because they’re the only network in America that is truly invested in you and now is the time to download the Fox weather app because weather is more key in these markets than ever.

Now is also the time to open your futures trading account and get a free trial to my Daily Trade Levels that will give you entry, exit and stop points on the major futures markets. Call Phil Flynn at 888-264-5665 or e-mail me pflynn@pricegroup.com.