Finger on The Pulse
Daily Comings and Goings in the World Economic and Geopolitical News.
Wednesday: January 29th 2025
Laying down a little lumber history for you... American soft wood producers complained that Canadian producers had an unfair advantage sourced from lower royalty costs charged from the Canadian government for harvesting lumber from crown land. This fueled Trump 1.0 to implement a tariff on soft wood from Canada to protect U.S. producers. This tariff was upheld by Biden and currently sits just under 15%. If Trump 2.0 slaps on another 25%, imported lumber would be grossed up 40% from tariffs, and those who would pay?... home builders, buyers and consumers.
There has been roughly 20-30 major Canadian oil projects that were proposed and supported by major players, but then fell through in the past 20 years. Some projects (TC Energy - Energy East Pipeline - $1bn) have major sunk costs that never get recovered. From a corporations' standpoint, why risk it? Why not just keep the money flowing, take cash flow and invest in certainties, like paying down debt/paying back shareholders! Unless the Canadian government were to put their own money behind a project, I would probably just invest for growth in other markets... Not good for Canadian growth.
Current Oil Outlook & Events:
Oil trade is expected to be choppy in the near-term as investors digest a string of recent developments, such as
1) U.S. tariff threats,
2) sanctions on Russian energy flows, and
3) economic growth concerns in top consuming nations.
Additionally, OPEC+ has a ministerial meeting booked for Feb 3rd - current production cuts in question.
DJIA: 44,819.55
S&P: 6,057.70
Nasdaq: 19,733.59
Oil (WTI): 73.95
Trump’s Lumber Tariffs and Disaster Recovery
Oil prices drop as US stockpile grows, tariffs remain in focus
Tuesday: January 28th 2025
One of the executive orders that Trump signed in his first week of office - aimed at reducing the regulations on the energy industry, was one that seeks to "blunt the implementation of the National Environmental Policy Act by federal agencies". The impact of this is to remove the ammunition of certain 'Green Groups' who have been able to invoke the law which would impose a federal review of the environmental impact of a project and it's relation to public interest. Used correctly, an energy project can be effectively derailed by adversaries.
Although Trump is pushing for a production boom, producers are staying conservative, opting to payback investors and improve their balance sheets, rather than forking over large sums of money to increase their outputs.
DJIA: 44,756.36
S&P: 6,026.97
Nasdaq: 19,418.22
Oil (WTI): 73.17
Trump Ramps Up Deportation Effort After Slow Start
Natural-Gas Firm Diversified Energy Strikes Deal for Permian Basin Player
Five Things to Know About Trump’s Energy Orders
Trump Executive Orders Target Biden’s Climate Executive Orders
Monday: January 27th 2025
There's this Chinese AI company (DeepSeek) who has reportedly "trained high-performing AI models cheaply", doing so without the expensive, most advanced gear that producers like Nvidia make. The result? An example that AI systems do not require the massive spending budgets to be functional. Nvidia's stock has dropped 10% in the wake of this news.
As we stand in limbo with the Parliament being prorogued, the Liberal Party of Canada is jostling for a leadership election. A recent report out of Vancouver's Fraser Institute found that over the Trudeau's government tenure the business investment per worker in Canada (adjusted for inflation) has declined by 20% from 2014-2021. In the States, the same figure has risen 14.6%. Okay, so what can be deduced from this stat? Not a ton; a simple figure alone does not paint a full picture of the quality of life of a Canadian family. But, I am confident to say that this decline in investment shines a light on a weakness in our economy (Canada) which will take much effort, influence, investment and leadership to remedy, let alone overcome.
DJIA: 44,148.84
S&P: 5,969.04
Nasdaq: 19,234.04
Oil (WTI): 74.47
Stock Market Today: Nvidia Stock Sinks in AI Rout Sparked by China's DeepSeek
Justin Trudeau Puts Canada on Ice
Friday: January 24th 2025
Vivek leaves the DOGE force spinning the change into a plan to run for governor in his home state of Ohio in 2026. Doge will be run solely by Musk as reports have come out about internal conflicts with Vivek between him and Trump and also with Musk. Doge has already been the recipients of 3 lawsuits from public advocacy groups and the government employees' union stating DOGE members are violating written Acts.
DJIA: 44,533.75
Nasdaq: 20,087.10
Oil (WTI): 74.28
How a Trump Trade War Puts Cheap Oil From Canada at Risk
Inside the Elon Musk, Vivek Ramaswamy DOGE Divorce
Tuesday: January 21st 2025
Does this Tik Tok situation really pose an issue of national security to Americans and Canadians alike? I'm not so sure. I mean, yes, is the constant flow of stimulating, mind numbing and mood altering videos damaging to a persons health? Absolutely! But so is alcohol which is openly sold on store shelves for personal consumption. I feel governments have already insulated themselves in the most practical way against infiltration of foreign governments accessing sensitive information through Tik Tok (via banning the app from government employees work phones). So what else can a foreign power syphon out of us through the app? Likely not much more than anyone could through any other app.
Beautifully written line: "His first day in office showed that he will continue to ping-pong between the serious and the stunning, participating in official Washington rituals one minute and whipping up his devoted supporters the next."
The GSA is a government agency in charge of managing all federal property, services like computer hardware for government agents, vehicles and even caterings services. The GSA owns more than 7,500 vacant buildings across the U.S. culminating to a 12% occupancy rate. This will likely be a point of interest for the Musk-Ramaswamy-led DOGE office.
DJIA: 43,528.65
Nasdaq: 19,734.39
Oil (WTI): 76.84
American TikTokers Get a Taste of Chinese Censorship as They Rush to RedNote
Trump’s First Day in Office: Signing Orders, Spinning Yarns, Settling Scores
The U.S. Government Has a Landlord, and Trump Isn’t a Fan
A List of Trump’s Key Executive Orders—So Far
Monday: January 20th 2025
The day has come. Donald Trump has been inaugurated as the 47th President of the United States. He did not, however offer niceties as he bluntly re-iterated the key messages of his campaign during his acceptance speech in front of Biden and Harris. We will see if this truly is the dawn of the "Golden Age of America".
With the new office now in charge, one of the executive orders expected to be signed later today is in reference to the resumption of LNG permitting in the U.S.. Permitting for companies in the U.S. has been slowed down by the previous administration, specifically by not being lenient for companies that are unable to uphold the agreements of the original permit. Often, companies must obtain initial purchase orders from counterparties and use these agreements in order to obtain financial funding which can then be translated into breaking ground for construction of the LNG plants. Trump has campaigned that extensions will be provided to companies more easily if they are unable to obtain funding, sale agreements, or initiate construction in a timely manner due to any particular reason.
A Trump 1 era executive order which allowed LNG to be shipped via rail car was thrown out by a 3 judge panel on last Friday (Jan 17 2025) due to insufficient planning and consideration when the order was signed. The order did not state how many train cars can be used in one shipment or the maximum speed of the train. Personally, I think this is smart to be thrown out. These tanks carry an immense amount of energy, if one were to be punctured or derailed in a suburban area, there need not even be a spark for there to be a death tole by the gas alone. Seems a risky way to transport the gas to me without having a deep study to the risks done.
Trump to make it easier for LNG export permit renewals, sources say
US court throws out Trump-era rule allowing LNG rail transport
Canada Set to Benefit from LNG Supply Opportunities on the West Coast
Friday: January 17th 2025
55 bcm = 1,942 bcf. Russia is diversifying its export business after their dominant position controlling the supply of gas to the European market has been severed, a direct consequence of its war with Ukraine. Iran, notably has the second largest gas reserves in the world as a country after Russia. But, it still imports gas (including from Turkmenistan). The article states the reason for this stems from severe under-investment caused by U.S. sanctions. This is a move that shows Russia will find willing consumers for its oil, no matter what the G7 world powers think.
Meanwhile, a new LNG facility on the northern coast of BC is making solid strides. On Dec 30th of 2024 Western LNG LLC completed a private placement deal securing $150 MM USD, which includes a rights package for certain key stakeholders to invest a remaining amount of undisclosed money which will be payable once final approval from the Final Investment Decision (FID) is made. This will be another LNG export facility delivering WCSB natural gas to the worlds market. This facility will harness hydroelectricity to reduce its carbon footprint while delivering a net-zero production. This is good news for the industry. Next up: Federal approval.
Oil set for fourth week of gains on US sanctions
Russia eyes 55 bcm of gas exports to Iran per year, Putin says
Significant investment in Western LNG funds Ksi Lisims LNG and PRGT projects to FID
Thursday: January 16th 2025
Netanyahu's coalition government is made up of supporters mostly on the right-wing side of the spectrum. some of these right wing group leaders are upset with the proposition of the cease-fire, saying Netanyahu does not stand up for the values which he preached when lobbying for the support of the individual political groups to join and support his coalition-built government. These far right leaders (National Security Minister, Itamar Ben-Gvir especially) do not wish to end the war while Hamas still has hundreds of soldiers embedded in Gaza.
Lebanon has a new President after 2 years of the vacant seat. Lebanon has been a weak state for decades dating back to a sizable war in 1975. Hezbollah voted for the president in 2016 and had a large influence on his success in winning the seat. But since Israel took aim at Hezbollah last year for firing missiles from within the Lebanese boarders, Hezbollah's influence and power has been greatly diminished, leaving room for a hopeful Lebanese government to retain domestic and political control.
Netanyahu Strikes Cautious Tone on Gaza Cease-Fire as He Tries to Hold Government Together
Israel Delays Cabinet Vote on Cease-Fire Deal, Blames Hamas for Reneging
Lebanon Elects New President in Sign of Hezbollah’s Waning Influence
Wednesday: January 15th 2025
U.S. midwest refineries are set up to process heavy Canadian crude and would take significant investment to re-tool for refining other lighter American-Drilled crude oil. The Canadian oil comes at a significant discount as well, and the steady flow from Canada is a key input in the supply chain which has allowed the U.S. to become a net energy exporter in the past few years.
Tariffs will make the end product of energy 25% more expensive for the American importer. Thus, they will import less energy, and therefore a reduction in demand is likely to be felt on the Canadian producer's finances. This reduction in energy imports into the U.S. from Canada is likely meant to be back-filled by American producers, supported by Trump's "Drill Baby Drill" campaign and impending pro-oil policies expected to come into play in his early days of presidency.
What does this mean for Canadian producers? I expect there to be a reduction in margins in the short term while the U.S. stumbles in transitioning its supply chain - maintaining current imports but by negotiating lower prices on energy, squeezing margins for Canadian producers. TD analysts predict a 15% cut in margins for producers. There will be tariff retaliations across industries, but until the energy tariff is lifted, I see reduced demand for Canadian energy for the next year.
Despite Trump's claims, U.S. doesn't really have a trade deficit with Canada. Here's why
Potential Tariff Impacts on Oil & Gas Under the Trump Administration
Alberta should prepare ‘for the worst’ if U.S. imposes 25% tariffs starting next week: economist
Tuesday: January 14th 2025
Oil prices are receiving support from below due to recent sanctions set by the U.S. on Russian energy producers and 183 oil carrying vessels, part of their "shadow fleet" whom actively divert sanctions on Russian energy exports in place in response to the ongoing geopolitical situation with Ukraine. All is fine in the short term, yet the U.S. EIA released a report today with flat demand growth for oil in 2025 and 2026. These forecasts from large agencies have a large impact on the market prices of oil I have come to see.
Where does this go? For the next hundred years, oil prices will be subject to the negative narrative of energy transition groups that claim global demand is shrinking each year for oil/gas/fossil fuels, which then will be accompanied by interested groups like the AB government releasing reports of contrary data predicting an extra mmb/d demand for the next 5 years. This back and forth will persist, while the occasional geopolitical conflict will break out choking, or potentially choking supply chains in the middle-east or South America, giving rise to healthy pop in oil prices giving encouraging optimism to those impacted by the profits of oil and gas companies.
This may seem pessimistic, but I don't feel this knowledge is a bad thing. In fact, I feel it a prudent perspective. By viewing the industry in this "cynical" lens one can remove emotion from the peaks and valleys of commodity prices and instead focus their efforts on pockets that produce profits. This is where I intend to grow my strengths in during my next 40+ years of my career.
Trump Plans ‘Energy Dominance’ Executive Orders After Inauguration
Oil prices slip on US energy demand forecast
Microsoft deal signals booming demand from data centers to power AI