Cold Sanctions. The Energy Report 01/13/2025

Now suddenly Joe Biden, on his way out the door, wants to put sanctions on Russia and enforce them. The timeline of this does seem to want to create more difficulties for incoming President Trump. The U.S. Treasury on Friday imposed sanctions on Russian oil producers Gazprom Neft (SIBN.MM), opens new tab and Surgutneftegaz, as well as on 183 vessels that have shipped Russian oil. Buyers of oil in China and India are scrambling to secure supply ahead of sanctions. And it is leading to the possibility of economically damaging energy price spikes that could have been avoided.

Bloomberg is warning that, “The world is bracing for a fight for natural gas supplies this year, prolonging the pain of higher bills for consumers and factories in energy-hungry Europe and putting poorer emerging countries from Asia to South America at risk of getting priced out of the market.

This comes as the United States is facing a major Arctic blast hitting the country at a time where supplies are below average in every category. Crude oil is down, 6% below the five-year average, gasoline 1% below the five year and distillate 4% below the five-year average for this time of year.

Add to that the energy crisis in California and the heartbreaking and avoidable losses that we are seeing along Los Angeles Add to that a depleted Strategic Petroleum Reserve (SPR) that is going to create a situation that is going to make it very difficult for President Trump to keep prices low as he heads into office.

According to reports an Indian government official believes that OPEC may tap into some of their spare capacity to help keep prices down.

Natural gas prices are also surging on the cold weather. It’s not just here in the US but around the globe. Bloomberg is warning that, “The world is bracing for a fight for natural gas supplies this year, prolonging the pain of higher bills for consumers and factories in energy-hungry Europe and putting poorer emerging countries from Asia to South America at risk of getting priced out of the market.”

Again, the result of the energy transition fantasy is that the poor countries get priced out of energy and food. The energy transition is a scam that has been inflationary and it has hurt the poor and the middle class.

In California Reuters Reported that – Pipeline operator Kinder Morgan Inc (KMI.N), said that two of its fuel pipelines in Los Angeles have been shut since Jan. 8 due to power outages, as the most destructive wildfires in the city’s history continued to burn uncontained on Thursday. The company said the 515-mile (828.8 km) SFPP West pipeline and 566-mile CALNEV pipelines are not directly impacted by the fires, and it expects them to resume service once power has been restored.

With all these factors at play we’re going to see some extreme volatility over the next couple of days. That is one of the reasons that we continue to warn people to be hedged going into this winter even as prices plummeted after Labor Day, we felt that the long term outlook was extremely bullish eventually supply and demand start to rule the day and the computers stand by the wayside.

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