Trump nears victory in US election: Update 3

Spanish Market: Coal, Crude oil, Emissions, Natural gas, Oil products
06/11/24

Updates throughout with latest election results, market reaction

Former president Donald Trump appears to be closing in on victory in the US election, after winning several key swing states.

Trump, the Republican nominee, was declared the victor in Georgia and North Carolina shortly after midnight ET on election night, according to the Associated Press. Trump has also won the key state of Pennsylvania, several US networks said.

Trump was leading vice president Kamala Harris in all four other key swing states — Wisconsin and Arizona, Michigan and Nevada — based on partial results as of 02:00 ET (07:00 GMT) on 6 November.

The seven swing states will decide which candidate reaches the threshold of 270 electoral votes needed to win the election. Trump had secured 248 electoral votes as 02:00 ET, with Harris at 214. Victory in Pennsylvania, if confirmed, would give Trump 267 votes and all-but end Harris' chances of victory.

The prospect of Trump's re-election sent Brent crude futures down by as much as 2.5pc to a low of $73.64/bl, largely reflecting gains in the US dollar. A strong dollar tends to weigh on prices of commodities by making purchases more expensive for buyers using other currencies.

Trump has promised to pursue a radical shift for the US on policies related to energy, taxes, trade and foreign affairs — reversing many of the policies and legislation that Democrats have put in place under President Joe Biden.

On energy policy, Trump said he wants oil and gas producers to "drill, baby, drill" to bring down domestic energy prices and to dismantle many of the regulations and climate policies put in place by Biden, which Trump dubbed the "Green New Scam". Trump said he would immediately lift a "pause" on licensing new LNG export terminals and restart oil development in Alaska's Arctic National Wildlife Refuge. Trump wants to impose a 20pc tariff on all foreign imports and even higher tariffs on China.

The next president faces decisions on the future of US support for Ukraine and related restrictions on Russian energy exports, enforcing US sanctions against Iran and Venezuela and how to contain the growing threat of an Israel-Iran war and its potential impacts on oil flows from the Middle East.

Republicans also took control of the US Senate for the first time in four years. In the US House of Representatives, too many races are undecided for major networks to project control.

In 2025, the US Congress is poised for a major fight on tax policy because of the year-end expiration of an estimated $4 trillion in tax cuts.

By Chris Knight, Haik Gugarats and Kevin Foster

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

09/12/24

Braya may idle Canada RD plant by year-end

New York, 9 December (Argus) — The largest renewable diesel (RD) producer in Canada is weighing whether to idle its 18,000 b/d biorefinery before the end of the year, citing poor margins and uncertainty about US biofuels policy. Braya Renewable Fuels — which began commercial operations in February at a former petroleum refinery in Come-by-Chance, Newfoundland and Labrador — said any potential shutdown would be temporary to see if market conditions improve. The company had previously planned to increase capacity to 35,000 b/d and to also produce sustainable aviation fuel. "Braya plans to retain its permanent workforce if a temporary economic shutdown is required" and "all equipment would be maintained in good condition and in a ready to start mode", refinery manager Paul Burton said. Other Canadian biorefineries have criticized what they see as an unlevel playing field between US and Canadian producers, since ample supply of US-produced renewable diesel has arrived in Canada this year and helped crash prices of federal and British Columbia clean fuel credits. Economics for Canadian biofuel producers could worsen in January when a US tax credit for blenders of biomass-based diesel expires and is replaced by an incentive that can exclusively be claimed by US producers, likely deterring foreign fuel imports. Braya has seen "lower-than-normal margins" recently and "short-term market disruptions" from the looming expiration of that blenders credit, Burton said. A proposal to extend the blenders credit for another year faces long odds in Congress' lame duck session, energy lobbyists have said . Braya has exported more than 2.1mn bl of renewable diesel into the US this year, largely into California, bills of lading indicate. An additional vessel with an estimated 345,000 bl of renewable diesel was scheduled to reach Long Beach, California, last weekend according to data from trade and analytics platforms Kpler, reflecting foreign producers' incentive to rush biofuel into the US before the end of the year. Braya has also criticized policy shifts in California, where regulators recently updated the state low-carbon fuel standard to eventually limit credit generating opportunities for fuels made from soybean and canola oil. In August comments to California regulators, Braya said that it had "entered into tens of millions of dollars of soybean oil feedstock contracts for 2025" and that soybean oil at the time represented "well in excess" of 20pc of its feedstock mix. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

German heating oil demand surges before CO2 tax hike

09/12/24

German heating oil demand surges before CO2 tax hike

Hamburg, 9 December (Argus) — Consumers in Germany stocked up on heating oil during the past week in preparation for the CO2 tax hike in 2025, taking advantage of the recent drop in prices. Traded volumes of heating oil, as reported to Argus, rose by almost half last week on the week. Consumers seized the opportunity of low prices — which had fallen by about €4.50/100l since 22 November — to build up their heating oil inventories again, despite storage levels still being unusually high. Privately-owned heating oil tanks were maintained at an average filling level of 60.6pc on 5 December, two percentage points up from 2023, as shown by data from Argus MDX. The continued stocking up on heating oil is largely because of the anticipated price increase from 1 January. Germany's CO2 tax will increase from €45/tCO2eq in 2024 to €55/tCO2eq in 2025. This would result in a price increase of about €2.70/100l for heating oil, according to Argus calculations. But traders are reporting premiums in the range of €3/100l to €4/100l for heating oil in January. Diesel prices could increase by about €3.50/100l in January, Ar gus calculations show. In addition to the CO2 tax increase, the greenhouse gas (GHG) quota, which will rise from 9.35pc to 10.6pc next year, will also impact diesel prices. Diesel for delivery in January is currently trading at between €4/100l and €7.50/100l higher than for December delivery, traders said. As a result, traders anticipate that diesel demand will also increase before the year ends, but it remains low so far. The fill level of industrial diesel tanks has started to recover after hitting a four-year low at the beginning of November. The level was about 53.6pc on 5 December, less than one percentage point below the same time last year. By Natalie Müller Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Shale M&A to pick up pace in 2025 after hitting pause

09/12/24

Shale M&A to pick up pace in 2025 after hitting pause

New York, 9 December (Argus) — A slowdown in shale deals in recent months is set to be reversed next year, helped in part by speculation that oil and gas mergers will have an easier time getting anti-trust approval under president-elect Donald Trump. The $12bn in upstream deals recorded in the third quarter was the lowest tally since the first three months of 2023, just before a record-breaking streak that reshaped the shale landscape and was dominated by blockbuster transactions involving ExxonMobil and Chevron. While buyers have been focused on winning approval from a zealous regulator and pushing deals over the finish line, attention is turning to the billions of dollars of unwanted assets they are likely to want to offload, with companies from ExxonMobil to Occidental Petroleum already active on this front. "You do one of these mega-mergers and now you have to pay for it," law firm Hogan Lovells partner Niki Roberts says. "You pay for it by selling off all the stuff you didn't really want to begin with." One potential upside from the Trump administration may be less attention from the Federal Trade Commission, which has paid closer scrutiny to oil deals in recent months as it cracks down on anti-competitive behaviour. Tie-ups have been delayed while the regulator has sought more details, and two high-profile oil executives were barred from the boards of their acquirers as a condition of approving deals. "The antitrust regulators have been viewed by particularly the traditional oil and gas industry of late as not being friendly to that industry," law firm Sidley global leader of energy, transport and infrastructure Cliff Vrielink says. "You're going to see less resistance to consolidation and you're going to see more people pursuing those opportunities." Oil market volatility has hampered mergers and acquisitions in the past, but observers say price swings are less of a factor these days. And more deals are needed to help companies boost their inventory of drilling locations for as long as cash flow remains king and growing through the drillbit is challenged. Lower interest rates, controlled inflation and regulatory reforms all point to a "robust" M&A market, Sidley partner Stephen Boone says. The majority of deal-making has been focused on oil in recent years, but natural gas is "having a bit of a moment", aided by the surge in demand from a boom in energy-hungry US data centres that are developing and supporting artificial intelligence, Boone says. Privates on parade Private equity is also making a gradual comeback, with teams looking to deploy fresh capital in oil and gas. Quantum Capital Group raised over $10bn in October and EnCap Investments has reloaded with about $6.4bn. "We are just now getting back to pre-pandemic levels of commitment," Boone says. "That bodes towards probably more private equity involvement in the oil and gas space." Fierce competition to get a foothold in the prized Permian basin of west Texas and southeastern New Mexico has sent valuations soaring, and prompted some would-be buyers to look further afield to plays such as the Uinta in Utah and North Dakota's Bakken. "The Permian stays of interest to many because of its consistent returns, but the Permian is a crowded place right now, and so I do think we'll see development of other basins," Roberts says. "But it's all going to depend on price." Close to $300bn in upstream deals were signed in the US over the past two years and this has whittled down the list of remaining targets. But the largest producers may not be done when it comes to seeking out potential acquisitions. "We don't stop looking," ConocoPhillips vice-president and treasurer Konnie Haynes-Welsh told the Rice Energy Finance Summit on 15 November. "We're always looking to be opportunistic." By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Atlantic LNG: US fob prices edge lower

06/12/24

Atlantic LNG: US fob prices edge lower

London, 6 December (Argus) — Fob LNG prices for loadings in the US Gulf coast slipped on Friday, adding to losses posted over Wednesday-Thursday to end the week lower. The Argus Gulf Coast (AGC) January fob price fell to $13.81/mn Btu, from $13.90/mn Btu a day earlier, and $14.16/mn Btu at the end of last week, following similar losses in European delivered markets. But the price continued to track European des prices, as the inter-basin arbitrage for US January loadings held shut with European markets holding at a discount to Asia that was too tight to cover the additional spot freight costs — which have been buoyed by a recent small rise in prompt spot charter rates over this week. The ARV3 prompt rate for US-northeast Asia by tri-fuel diesel-electric (TFDE) carriers was assessed at $14,000/d on Friday, up from $12,000/d a week earlier, while the corresponding ARV6 two-stroke rate rose to $28,500/d on Friday from $24,000/d. US LNG production this week has been steady at six of the country's operational liquefaction terminals. But Texas' 17.3mn t/yr Freeport LNG export terminal experienced a trip at its first of three liquefaction trains on 4 December, because of an unspecified issue at a compressor system, according to a state regulatory filing by the facility. That said, the terminal's feedgas receipts quickly rebounded a day later to reach 2.02bn ft³ over the day — the most received by the terminal since 13 November. Freeport was nominated to take 2.12bn ft³ on Friday, though the terminal has historically taken less at times than it has initially nominated to receive. Even with one day of downtime at a single train this week, Freeport's gas receipts were still greater than during the previous week, when deliveries over the opening three days of the week were also at levels suggesting one train of off line. Deliveries to the planned 27.2mn t/yr Plaquemines terminal — set to be the US' eighth liquefaction terminal — have held at low levels, suggesting that the facility may still be only receiving enough gas to meet its on-site needs rather than fully starting liquefaction operations. The 174,000m³ Venture Bayou remained at the facility on Friday, where it has been since mid-November. Plaquemines received a cool-down cargo in late September, for which it has regulatory approval to re-export, as well as a further two cool-down cargoes that have not been delivered to the facility. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Republicans weigh two-step plan on energy, taxes

06/12/24

Republicans weigh two-step plan on energy, taxes

Washington, 6 December (Argus) — Republicans in the US Congress are considering trying to pass president-elect Donald Trump's legislative agenda by voting first on a filibuster-proof budget package that revises energy policy, then taking up a separate tax cut bill later in 2025. The two-part strategy, floated by incoming US Senate majority leader John Thune (R-South Dakota), could deliver Trump an early win by putting immigration, border security and energy policy changes into a single budget bill that could pass early next year without Democratic support. Republicans would then have more time to debate a separate — and likely more complex — budget package that would focus on extending a tax package expected to cost more than $4 trillion over 10 years. The legislative strategy is a "possibility" floated among Senate Republicans for achieving Trump's legislative goals on "energy dominance," the border, national security and extending tax cuts, Thune said in an interview with Fox News this week. Thune said he was still having conversations with House Republicans and Trump's team on what strategy to pursue. Republicans plan to use a process called budget reconciliation to advance most of Trump's legislative goals, which would avoid a Democratic filibuster but restrict the scope of policy changes to those that directly affect the budget. But some Republicans worry the potential two-part strategy could fracture the caucus and cause some key policies getting dropped, spurring a debate among Republicans over how to move forward. "We have a menu of options in front of us," US House speaker Mike Johnson (R-Louisiana) said this week in an interview with Fox News. "Leader Thune and I were talking as recently as within the last hour about the priority of how we do it and in what sequence." Republicans have yet to decide what changes they will make to the Inflation Reduction Act, which includes hundreds of billions of dollars of tax credits for wind, solar, electric vehicles, battery manufacturing, carbon capture and clean hydrogen. A group of 18 House Republicans in August said they opposed a "full repeal" of the 2022 law. Republicans next year will start with only a 220-215 majority in the House, which will then drop to 217-215 once two Republicans join the Trump administration and representative Matt Gaetz (R-Florida) resigns. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more