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• Occidental CEO: Expect supply challenges starting in 2025
  Global oil supply will be constrained starting in 2025 as demand outpaces oil exploration activity, said...
  Global oil supply will be constrained starting in 2025 as demand outpaces oil exploration activity, said Occidental CEO Vicki Hollub, speaking at the World Economic Forum. Hollub noted that a move to prioritize tapping shale oil reserves in 2012 over exploration contributed to the challenge since shale has a shorter lifespan than oil that is conventionally produced.
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• Closing Oil & Gas Prices
  Benchmark U.S. crude oil for February delivery...
  Benchmark U.S. crude oil for February delivery rose 16 cents to $72.56 per barrel Wednesday. Brent crude for March delivery fell 41 cents to $77.88 per barrel.
  
  Wholesale gasoline for February delivery rose 2 cents to $2.14 a gallon. February heating oil fell 1 cent to $2.65 a gallon. February natural gas fell 3 cents to $2.87 per 1,000 cubic feet.
  
  
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• Dow Jones seals third straight day of losses as S&P and Nasdaq also fall
  (Wednesday market close) U.S. equities extended...
  (Wednesday market close) U.S. equities extended this week's broad slide Wednesday, sending the S&P 500^® index (SPX) near a two-week low as a stronger-than-expected Retail Sales report pushed Treasury yields higher and forced investors to further rein in expectations for interest rate cuts by the Federal Reserve.
  
  Early Wednesday, the Census Bureau said U.S. retail sales rose 0.6% in December over November, above the Briefing.com consensus for a gain of 0.4% and the largest monthly gain since September. Compared to December 2022, retail sales surged 5.6%, suggesting consumer spending remained robust last year even as the job market and other aspects of the economy showed signs of slowing.
  
  The sales report helped lift the benchmark U.S. 10-year Treasury note yield (TNX) to a five-week high near 4.13% and prompted investors to continue tempering beliefs an initial Fed rate cut could happen as soon as March.
  
  "Consumers ended the year on a high," said Cooper Howard, director of fixed income strategy at the Schwab Center for Financial Research. The better-than-expected retail sales "bodes well for GDP. Overall, consumer spending remains healthy because people have jobs." Here's where the major benchmarks ended:
  
  The S&P 500 index fell 26.77 points (0.6%) to 4,739.21; the Dow Jones Industrial Average^® (DJI) lost 94.45 points (0.3%) to 37,266.67; the Nasdaq Composite^® (COMP) dropped 88.73 points (0.6%) to 14,855.62.
  
  The 10-year Treasury note yield rose more than 3 basis points to 4.10%.
  
  The Cboe^® Volatility Index (VIX) climbed 0.95 to 14.79.
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• Retail sales jumped in December, showing strength of the American consumer
  The numbers: Sales at retailers jumped 0.6% in...
  The numbers: Sales at retailers jumped 0.6% in December to cap off a fairly robust holiday shopping season and underscore the resilience of a still-growing U.S. economy.
  
  Economists polled by The Wall Street Journal had forecast a 0.4% increase. Taken together, sales in November and December suggest a better-than-expected holiday shopping season. November receipts rose 0.3%.
  
  Retail sales represent about one-third of all consumer spending and offer clues on the strength of the economy. Sales grew a solid 5.6% in 2023, almost double the rate of inflation.
  
  Big picture: The robust retail report bolsters the case for the Federal Reserve to wait a while before cutting interest rates given the strength of the economy, analysts say. It also shows little threat for now of recession.
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• Energy Sector Commentary
  The energy sector is off to a lower start, pressured by weakness in the...

  The energy sector is off to a lower start, pressured by weakness in the underlying commodities and the major equity indices extending yesterday’s losses as optimism for aggressive rate cuts this year continues to fade away.

  
  

  WTI and Brent crude oil futures dropped this morning as traders digested dim economic data from China, which raised concerns about future demand and a higher dollar. China’s economy grew less than expected in the fourth quarter amid their ongoing property crisis, deflationary pressures, and weak demand. The world’s second-largest crude importer’s GPD grew 5.2% in October-December from a year earlier, higher than 4.9% in the third quarter but slightly off a 5.3% forecast in a Reuters poll. The U.S. dollar index rose near a one-month high on comments from Federal Reserve officials which lowered expectations for aggressive interest rate cuts. OPEC’s Monthly Oil Market Report showed the global oil demand growth forecast for 2024 remains unchanged at 2.2 mb/d, with the OECD growing by around 0.3 mb/d and the non-OECD by about 2.0 mb/d. However, the report shows that global oil demand in 2025 is expected to grow robustly by 1.8 mb/d, y-o-y. The OECD is expected to grow by 0.1 mb/d, y-o-y, while demand in the non-OECD is forecast to increase by 1.7 mb/d.

  
  

  Natural gas futures are extending yesterday’s sharp losses on forecasts for temperatures to turn warmer after the recent winter storms. 

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