U.S. Refinery Capacity: According to IIR Energy, U.S. refiners are expected to leave approximately 149k bpd of capacity offline this week, decreasing available capacity by 108k bpd. The figure for offline capacity is expected to rise during the week ending January 10 to 845k bpd. 

Chinese Economic Data: The Chinese PMI factory survey is due out tomorrow. The index gives investors an idea of what input costs are for manufacturing activity in China are and an indirect indication on the economic health. Optimism has been ongoing for the Chinese economy, as the government recently approved a 3 trillion Yuan bond issuance to support the economic aid package approved earlier this year. 

Seized Crude Tanker: The Finnish Coast Guard seized a Cook Islands' registered vessel that was carrying Russian crude oil, as well as suspected of intentionally cutting the Estlink2 power line that ran between Finland and Estonia. The ship named Eagle S is believed to be part of a Russian shadow fleet that is evading sanctions by transporting crude oil. The Kremlin commented on this event, and says it was of little concern to the Russian government. 

Market Overview: Markets are posed higher this morning from the consideration that both the Chinese and U.S. economies are healthy and are poised to continue fuel demand growth in 2025. Both countries have economic data that will be released this week. Additional support is coming from the impact that reduced refinery utilization will have on inventories, as less product will be able to make it to market for a short period in January. 

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U.S crude prices have gained some ground since the low of the month at $66.98/bbl. Current trade is almost $71/bbl. All in all, a relatively quiet month for the contract, but seasonal demands for finished products might weigh on the contract as we get into calendar 2025. The expectation of increasing demand for energy in 2025 should keep prices optimistic for producers.

Energy contract prices rose during the session as the end of the calendar year approaches. Cold weather forecasts in both Europe and North America propped up heating oil contracts, as well as natural gas prices. Heating oil is used as a substitute for natural gas in some regions. Additional support came from the anticipation of economic data due out this week from the top oil consuming economies - the United States and China. A weak Chinese economy could provide an oversupplied market.