US First Polar Plunge Of The Season Helps ULSD Futures Lead Energy Markets Higher

Energy markets are ticking modestly higher to start the week, with ULSD (AKA Heating Oil) futures once again leading the move higher as the US takes its first polar plunge of the season.

So far there aren’t any reported upsets as Refinery Row along the US Gulf Coast dipped below freezing overnight, which has the potential to disrupt operations that aren’t built for cold weather. With lows in the 30s rather than the teens, any major upsets seem unlikely at this point, and while other parts of the south face freezing temperatures over the next couple of days, the worst of the cold for the Gulf Coast should be behind us.

Thursday, January 9th is a national day of mourning for former U.S. President Jimmy Carter. While many federal operations will shut for the day, unlike a federal holiday, the Federal Reserve will continue to operate so it will not be considered a banking holiday. The CME Group is keeping energy markets open for the day so it should be a relatively normal day for the petroleum industry, while equity and interest rate traders will get the day off.

The outgoing U.S. President announced an executive order Monday banning oil and gas drilling across the U.S. East and West coasts, the eastern portion of the Gulf of Mexico, and the northern section of the Bering Sea in Alaska. In other words, he’s banning drilling where it’s not happening anyway at a time when the world has more than enough supply.

The EIA this morning published a look at the lack of volatility in oil markets during 2024, noting the range for Brent crude oil prices was at its lowest level since 2019.

Baker Hughes reported a decrease of 1 oil rig and an increase of 1 natural gas rig drilling in the U.S. last week, starting the new year right where 2024 left off with lackluster activity.

The CFTC’s Commitments of Traders report was delayed by the New Year holiday last week and is due out later this afternoon.

Marathon reported unplanned flaring at the Wilmington section of its LA refining complex late Friday afternoon after trading had wrapped up for the day.

Today’s interesting read: Why China’s teapot refineries face a reckoning this year and could be sacrificed in the tariff wars.