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First Look - Oil trades lower by more than $2/Bbl

WTI is trading lower by more than $2, ahead of contract expiry
- The February WTI contract is set to expire, making March the new prompt contract
- Prices fell following the inauguration of President Trump and his comments about boosting domestic energy production
  - Tariffs on Canada and Mexico are set to begin on February 1
  - Trump also said he plans to refill the Strategic Petroleum Reserve
Aramco still sees China driving oil demand growth (BBG)
- Despite concerns about peaking demand growth in China, Saudi Aramco’s CEO said that they believe demand growth in China will continue to increase year-over-year
- While demand for transportation fuels has been subdued, petrochemical demand is expected to remain strong and continue to rise
- Last year, China’s oil consumption increased by only 180 MBbl/d, significantly less than in recent years, amid an economic slowdown in the country

Natural gas is down Tuesday morning 14c to $3.80 (7:35 CT)
- Current conditions nationwide may be fridged, but some weather models show warmth in the first few days of February
- The Commodity Weather Group is forecasting ‘normal’ February weather with HDDs nearly the same as the 10-year average at 742
- Turning back to cold conditions today, NOAA is forecasting the biggest snow for New Orleans since 1963
- Henry Hub cash prices are $10/MMBtu today due to the large swath of cold temperatures across the US
He’s Back – Trump issued a handful of sweeping overhauls pertaining to US energy policy
- The President has lifted a moratorium on new US licenses to export LNG
- In his new order, Trump directed the Energy Department to consider the economic and employment benefits of approving new export permits, as well as the “impact to the security of allies and partners.” (Bloomberg)
- AEGIS notes that US LNG demand is near records at 15.67 Bcf/d
- Biden’s pause disrupted plans for large export projects by Venture Global, Energy Transfer, and Commonwealth LNG