Fire Ice and Trump in Davos. The Energy Report 01/21/2026

A Firey speech by President Trump In Davos and ice and cold is having major impact on the energy space. Oil prices are being anchored as more Venezuelan supply is creating calm just as demand prospects start to heat up again and temperatures plummet. As this brutal winter storms roll across the country, we’re seeing diesel and natural gas prices skyrocket, lighting a fire under the energy market. President Trump told Davos, Switzerland that energy companies will join him in Venezuela, and Venezuela will earn more from oil than it has in over 50 years.

President Trump also touted his new affinity for nuclear power and because of the new improvements in safety as well as telling the world that we’re leading the world in artificial intelligence by far. He’s also talking about the fast tracking of approvals for nuclear power plants and the private sector investing heavily to meet the demands for artificial intelligence which is all going to be major League energy centric.

This comes as the International Energy Agency (IEA) had to raise their oil demand forecast once again as President Trump’s policies did not cause the havoc, they seem to have been hoping for increasing  the 2026 average oil demand growth forecast to 930,000 bpd vs prev. forecast 860,000 bpd.

The IEA projects a significant oil surplus for the first quarter of 2026, assuming no major supply disruptions, as refiners gear up for scheduled maintenance. The IEA has also increased its outlook for world oil supply, now anticipating a 2.5 million bpd rise in 2026 compared to the previous 2.4 million bpd forecast. Their latest monthly report highlights that global oil supply is expected to outpace demand by 3.69 million bpd in 2026, a slight adjustment from the prior estimate of 3.84 million bpd—demonstrating a strong and resilient energy market on the horizon.

Fox Weather says a monster winter storm could be a game-changer, stretching over 2,000 miles, threatening more than 30 states, and putting over 175 million Americans directly in its crosshairs. Beginning Friday, millions are being put on alert with Winter Storm Watches as the nation’s energy demand looks primed to surge. Bundle up, because this could be the catalyst that sends prices even higher.

The bitter cold is set to blast the Northeast, Midwest, and parts of the South and Southwest, with brutal temperatures plunging as low as -10°F to  -30°F when you factor in those fierce wind chills! This deep freeze is hurting p production, especially for natural gas. Daily output is taking a hit, with losses soaring to as much as 10 Bcf/d at peak times! Even under more moderate scenarios, we’re seeing production drops between 0.2 and 2.5 Bcf/d across the hardest-hit regions, starting around January 20–22 and sticking around through January 31.

President Trump’s influence on Venezuelan oil supplies is helping stabilize the market. Not only did we confiscate more of the shadow tankers that’s trying to move sanction oil the buffer of supply brought down prices after president trump mentioned that we he expects to see more oil supply and massive investment in Venezuela to continue.  US Energy Secretary Chris Wright tells oil execs Venezuela output can rise 30% in short-medium term  which is higher than many thought was possible.

Reuters Reports that Indian refiners are redrawing crude import strategies to shift away from top supplier Russia and boost imports from the Middle East, a move that could help New Delhi clinch a trade deal with the United States to lower tariffs.

India became the top buyer of discounted Russian seaborne crude after the 2022 outbreak of war in Ukraine, but the trade drew backlash from Western nations targeting Russia’s energy sector with sanctions, saying oil revenues help it fund the war.

Fox News Reported that The Department of War announced Tuesday U.S. military forces apprehended another sanctioned tanker vessel in the Caribbean as part of its mission to crush illicit activity in the Western Hemisphere. U.S. Southern Command confirmed Motor Vessel Sagitta was apprehended earlier in the day without incident. Video showed the vessel moving through the ocean with people on board the deck of the ship. “The apprehension of another tanker operating in defiance of President Trump’s established quarantine of sanctioned vessels in the Caribbean demonstrates our resolve to ensure that the only oil leaving Venezuela will be oil that is coordinated properly and lawfully,” officials wrote in a statement on social media.

“As the joint force operates in the Western Hemisphere, we reaffirm that the security of the American people is paramount, demonstrating our commitment to safety and stability.” The apprehension was part of #OpSouthernSpear, in partnership with the U.S. Coast Guard, Department of Homeland Security and the Justice Department.  The U.S. has now seized seven oil tankers since ramping up its campaign against illicit oil trade by Venezuela.

President Trump is also highlighting what he calls the “ridiculous green new scam deals” that have hurt the European economy, resulting in higher prices and less reliability. President Trump’s leadership on energy at the world stage is having a major impact, and he is telling Europe they are not heading in the right direction. If you look at what’s really happening in the energy sector, prices remain stable to higher due to record cold temperatures and strong demand, but these are being offset by expectations of increased oil supply from Venezuela and, hopefully, some relief in natural gas prices when the weather warms up.

The oil market’s doing its best impression of a seesaw – up on geopolitics one day, down on inventories the next. WTI’s hovering around that $60 sweet spot, up a tick at $60.50 a barrel after yesterday’s close, but don’t get too comfy; we’ve got the API report dropping like a New Year’s ball this afternoon (delayed to Wednesday 4:30 PM ET thanks to MLK Day).

First off, the API whisperers are calling for a build in crude stocks – about 1.7 million barrels for the week ending January 16. That’s after last week’s shocker: a whopping 5.27-million-barrel surprise build when the crystal balls predicted a draw. If today’s numbers confirm another pillow fight in the storage tanks, it could keep the bears growling and prices under pressure.

But hey, in this   balanced supplied world, even a build might not spoil the party if demand stays peppy. Speaking of which, distillates and gasoline could tell a different tale –

President Trump is rewriting the Venezuela script faster than a Hollywood reboot. With Maduro out of the picture (arrested and all), Trump’s team has inked “historic” deals to pump more Venezuelan crude into the global mix. We’re talking billions in investments to fix their rickety rigs, and the U.S. is already cashing in – first oil sale netted $500 million, stashed in Treasury accounts shielded from lawsuits by Trump’s shiny new Executive Order. It’s like Uncle Sam became Venezuela’s banker overnight, safeguarding revenues “for the good of the American and Venezuelan people.”

ion: More heavy sour crude flooding the market, easing supply worries, and keeping a lid on prices.  But here’s the clever twist – Trump’s calling it payback for Venezuela “stealing” U.S. assets years ago. Poetic justice or just good business?  Either way, it’s a win for refiners stateside, potentially adding up to 2 million barrels a day if things ramp up.

Recent protests in Tehran raised fears of oil supply disruptions through the Strait of Hormuz, briefly increasing oil prices. However, after a crackdown ended the unrest, prices stabilized amid a global surplus—IEA projects a 2.5 million b/d surplus by 2026, with OPEC+ having 4 million b/d in spare capacity. No major U.S. action against Iran is expected, and Venezuela’s expanding oil output is drawing more attention. Strong U.S. economic growth (2–2.5% GDP forecast for 2026) and steady unemployment could boost energy demand, though tariffs may pose some risks. Overall, oil prices are likely to remain range-bound unless significant disruption occurs.

Make sure you stay tuned to the Fox Business Network, as they are the only network in America that is invested in you. Download the Fox Weather app to keep up with the latest breaking weather news, because this polar vortex could be the difference between high and low prices for days to come. Also, sign up for the Phil Flynn Daily Trades by calling 888-264-5665 or emailing me at pflynn@pricegroup.com.

 

Thanks,

Phil Flynn

Senior Market Analyst & Author of The Energy Report

Contributor to FOX Business Network

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