Inauguration Day: Today is inauguration of U.S. President-elect Donald Trump. With the administration change, traders are awaiting further clarity on new regime’s policy agenda. Of particular interest will be plans of how to end the Russia-Ukraine war. There is some expectation that energy-related sanctions against Russia could be relaxed in exchange for an end to the war in Ukraine. Plus, there is the possibility the new administration could be especially tough on the oil industry for both Iran and Venezuela. Also, UBS analyst Giovanni Staunovo suggests there will be plenty of focus on what executive orders will be signed over the first 24 hours of the new presidency. Depending on the actions, recent price gains could be short-lived.
Further reduction in U.S. oil rigs: On Friday, in its weekly report, Baker Hughes indicated that U.S. oil rigs fell by 2 as now counted 478 of them. This is lowest level since November. The Williston basin (in North Dakota and Montana), saw drillers cut oil rigs by four as now totals 33 which is lowest level since January 2024. The U.S. Energy Information Administration (EIA) still anticipates 2025 crude output rising to about 13.6 million barrels per day (bpd) after 2024 was at 13.2 million bpd.
Libya: The economy here relies heavily on oil as it accounts for more than 95% of its economic output. Recently, oil production had reached 1.4 million bpd but is looking to get back to 1.6 million bpd level (and above) which had been achieved prior to the 2011 NATO-backed uprising that ended reign of Muammar Gaddafi. To make this increase happen, they will need $3 billion to $4 billion which would be raised via a new license bidding round for oil and gas exploration. This action is expected to be approved by its cabinet before the end of January. The last such round of bidding was declared 17 years ago.
Market Overview: Values this morning are showing to be off a bit early on the inauguration day for Donald Trump. For the United States, note markets will halt trading at 1:30 pm CST in honor of Martin Luther King Jr. holiday. Then, trading will resume tomorrow morning.
OPEC's share of India's oil imports rises in 2024
India is the world’s third-biggest oil importer and consumer with 2024 data showing the country had imported 4.84 million barrels per day (bpd) which was up 4.3% from previous year. Russia did continue to be top oil supplier as share continued steady at about 36%. However, OPEC (Organization of the Petroleum Exporting Countries) was able to increase its share to nearly 51.5% (after being at 49.6% in 2023). This represents the first year on year increase in 8 years. OPEC’s share had been declining since 2016 (after many years around 80% share) with India’s refiners diversifying to reduce costs and being particularly drawn to discounted Russian oil. As 2024 concluded, Iraq and Saudi Arabia are 2nd and 3rd leading suppliers to India. Russian share is anticipated to drop in 2025 considering sanctions announced earlier this month that will disrupt its supply.
Markets in the United States paused today in recognition of the Martin Luther King Jr. holiday. Donald J. Trump also indicated he would immediately be declaring a national energy emergency on the same day he was sworn in as 47th President of the U.S. This effort would look to export American energy all over the world while also promising to fill up strategic reserves. At today's market halt (there was no settlements considering U.S. holiday), West Texas Intermediate (WTI) crude was off by $1.30 (to $76.58) while the products were also showing small losses. Markets will resume trading tomorrow.