Early Chinese New Year! The Energy Report 12/31/2024

I know what you are thinking. Today is regular New Years Eve! But it appears China is making their New Year come early.

China fresh after hacking the US Treasury and finding out perhaps the cupboard was bare, upped their quota for oil imports and gave raises to government workers. Pop the champagne!

China increased its import quota to 5.84 million metric tons and that is equivalent to about $116,800 barrels a day according to data from Reuters. The China Commerce Minister says that non-state import quota for fuel oil in 2025 is set at 20 million metric tons.

This comes as China’s President Xi Jinping that that the Chinese economy is on track to hit its 5% growth target.
That didn’t seem to be that farfetched after China’s official non-manufacturing purchasing managers’ index rose to 52.2 the highest reading in 9 months and blowing away market expectations.

Perhaps China is on reason that we are starting se see a changes in the unrelenting bearish sentiment. Bloomberg is pointing out that bullish oil bets reached a four-month high.

They reported that money managers boosted net-long positions on West Texas Intermediate by 21,694 lots to 182,895 lots during the week ended Dec. 24, according to the Commodities Futures Trading Commission.  Some of that demand come from Iran unless Trump shuts them down. Tanker Trackers is reporting that Iran’s crude oil exports have rebounded sharply after a slower first half of December 2024.
Add to that the potential cold blast that is driving distillate and natural gas higher.
While the market in gas has pulled back the upside risks remain.

Fox Weather is reporting that ” Winter’s grip will return to half of the U.S. this week as a rush of arctic air descends, plunging temperatures from well above average to nearly 30 degrees below average for some.
Two areas of high pressure are responsible for this pattern change, driving the bitter cold south from Canada and into the eastern half of the U.S. This setup will sink temperatures nearly everywhere east of the Rocky Mountains and increase snow chances in the Northeast and Great Lakes.

We’re talking about a big, big cool down, to say the least, especially for places up and down the East Coast as we head into really the first few weeks of January,” FOX Weather Meteorologist Kendall Smith said. After the ball drops for the new year, 2025’s arctic outbreak begins Wednesday, and the cold will be here to stay by the first weekend of January.

The biggest changes will be in the northern Plains and eastern U.S., where high temperatures by mid-week will be between 20-30 degrees below what they were Monday.
This comes against a backdrop on reports from Russia Tass that natural gas supplies and oil from Russia Gazprom to Europe via Ukraine will stop today as Ukraine will not sign an extension of the agreement.

Putin stated there will definitely not be a new contract.”
. . . The tight  petro supply situation is getting more apparent to almost everyone add to that the record cold blast here and in Europe and people are starting to take notice i.
It looks as oil has broken out to the upside and we could target as high as $73.00 so 75 basis WTI.

Products are also looking very bullish don’t be surprised to see a lot of volatility but there is extreme upside risk as this cold front develops.

Should all the bad trades be forgot and never brought to mind? Happy New Year to all my loyal readers of The Energy Report! Have your beast year ever God Bless you all!
Download the Fox Weather Ap to keep up with the nasty cold blast. Stay tuned to the Fox Business Network! Invested in you ! Call tao open your account and start he New Year Right. Call 888-264-5665 or email pflynn@pricegroup.com.

Thanks,