Tuesday: May 13th 2025
With the latest deal struck between China and the U.S., investors are encouraged and the stock market has rallied. The 125% tariff that was raised on China has been reduced down to the 10% "universal" reciprocal tariff that all countries are subject to. China does still face a 20% fentanyl tariff, but has yet to enact anything tangible in terms of policies against the flow of the drug from its boarders. I think we have met the edge of tolerance for increased prices from the tariffs. Reports of increased prices, un-stocked shelves and failing small businesses are driving acceptance ratings for Trump's government lower the longer they are in place. As such, I predict further deals to be struck between different countries with the U.S. and greater easing of reciprocal tariffs as part of those deals. The value of these agreements will take years to be fully apparent.
DJIA: 42,507.33
S&P: 5,854.15
Nasdaq: 18,761.23
Oil (WTI): 62.00
ICE NGX (T-1): 1.89
Trump to Lift Sanctions on Syria, Touts Deals in Middle East Tour
Microsoft Slashing Thousands of Workers, Including Management Jobs
Trump’s China Deal Makes Sense. How He Got Here Doesn’t.
Thursday: May 8th 2025
New trade deals are beginning to be struck. The UK and the U.S. have signed the first of its kind new trade deal which amounts to about $5 billion USD in market access from reduction of some beef tariffs and removal of tariffs on U.S. ethanol. On the other end, the U.S. reduced the 25% tariff on the first 100,000 vehicles from the UK to 10% and took off the tariff on steel and aluminum imported into the U.S.. I think this signals the starting gun for many similar deals to be made between the U.S. and other global trading partners. Likely, these deals will remain small in scope, not covering the entire trading relationships between the U.S. and other trading nations/blocs... for now.
Russia now supplies only 19% of the European gas supply, down from 40%. Most of the supply from Russia comes from LNG, with a small portion via Turkey through the TurkStream pipeline. In a recent European parliamentary meeting, Commission President Ursula von der Leyen stated "Some are still saying that we should re-open the tap of Russian gas and oil. This would be a mistake of historic dimensions and we would never let it happen... Russia has proven, time and again, that it is not a reliable supplier."
DJIA: 41,312.57
S&P: 5,663.60
Nasdaq: 17,920.15
Oil (WTI): 57.93
ICE NGX (T-1): 1.57
U.S. and U.K. Unveil Framework for Trade Deal
One of Warren Buffett’s Last Big Bets Is Souring
Exclusive: US, Russia explore ways to restore Russian gas flows to Europe, sources say
Tuesday: May 6th 2025
Apparently a war-ending deal is closer than ever to being struck between Russia and Ukraine. It got me thinking, what if Trump got it all done? What if the Ukrainian war was finished tomorrow, and simultaneously so was the war in the middle east? Admittedly, never going to happen, but what if... First, Russian oil sanctions would likely be removed, resulting in a flood of Russian oil and gas hitting the markets. Europe's LNG demand would be greatly diminished as piped gas from Russia would begging to flow again through Ukraine. If the Middle East conflict also dried up, the risk premium for some 30-odd-percent of the worlds fossil fuel supply will be mostly erased. This would likely result in a $6-$8 haircut on the WTI and Brent prices. Global oil and gas prices would fall, potentially sparking growth in fuel demand in China and India. Specifically in China, this could assist in their recent market troubles and high risk of recession. In North America, profit margins would be squeezed. Do we even want these conflicts to be resolved??
Of course - our name isn't Chaney.
DJIA: 41,000.19
S&P: 5,605.87
Nasdaq: 17,623.21
Oil (WTI): 57.25
ICE NGX (T-1): 1.95
Carney meets Trump for first time, stresses Canada will never be for sale
Wall Street wobbles as markets navigate through tariff uncertainty; Fed in focus
Trump says with lower oil prices, Putin is more eager to settle the Ukraine war
Monday: May 5th 2025
The Hamas-Israel cease-fire fell apart in March. In large part, due to Hamas not delivering on their commitment to hand over the remaining hundreds of hostages while Israel handed over theirs (dozens in comparison). As a result, the Gaza strip has crumbled into dire circumstances with humanitarian aid basically non-existent. There are reports of 10-person families living in 2 bedroom apartments surviving off of 1 meal per day of macaroni and beans.
Today, the Israeli government has approved a plan to continue aid for necessities like food and clean drinking water through 10 hubs around the strip which will be secured through 3rd party American security details. The aim is to remove the chance for Hamas to co-opt the supply of these necessities.
In a second announcement from OPEC+ in the past weeks, the production cuts from the cartel are further reduced. This results in an increase of 960,000 bpd of crude into the world's supply from OPEC+. That culminates to a 4$% unwinding of the 2.2 mmb/d in voluntary cuts that were agreed on back in 2022.
Apparently the increase in production (or unwinding of cuts) has two purposes: challenging U.S. shale suply and penalizing its non-compliant members. Saudi Arabia - the de facto leader of the OPEC+ countries have been encouraging OPEC+ countries to speed up the unwinding of earlier output cuts to punish fellow members Iraq and Kazakhstan for poor compliance with their production quotas. Lower Brent/WTI = less profit for Iraq and Kazakhstan.
DJIA: 41,173.38
S&P: 5,655.32
Nasdaq: 17,817.01
Oil (WTI): 56.76
ICE NGX (T-1): 2.08
Israel Approves Plans to Occupy Gaza, Control Aid Distribution
Oil settles down more than $1 a barrel as OPEC+ accelerates output hikes
Friday: May 2nd 2025
Certain themes are developing in the current oil trade balance, shaping supply and demand characteristics:
- OPEC has a meeting this weekend about the production cuts. Currently 5 MMB/d are being restricted by OPEC+ members, and Saudi Arabia has indicated they are no longer interested in propping up the world trade balance. This could indicate further cuts to their production restrictions in months moving forward.
- The producers are bracing for the continued conflict of trade war between the U.S. and China. This has depressed oil prices recently.
- Lower oil prices, higher costs and lower demand are compressing margins for refiners in the U.S. given Chevron and Exxon's reported earnings today.
Spain showed signs of warning before the massive blackout earlier this week. Blackouts and glitches can be caused by both under and over-supply of energy into the grid. Renewables must be managed differently than fossil fuels as they are not as disposable, and as such, the utility operators must maintain a balance to ensure continuity. On April 22nd, 10 high speed trains were stranded due to a power cut from over-supply in the grid; an attempt to protect substations.
DJIA: 40,960.42
S&P: 5,645.88
Nasdaq: 17,868.76
Oil (WTI): 58.99
ICE NGX (T-1): 2.09
Exxon, Chevron Profits Fell Ahead of Tariff-Driven Oil Slump
Oil prices set for biggest weekly losses in a month ahead of OPEC+ meeting
How warning signs hinted at Spain's unprecedented power outage