Futures Are Trading Lower This Morning, With Crude And Heating Oil Leading The Way

Futures are trading lower this morning, with crude and heating oil leading the way, exchanging hands ~3% lower than where they ended last week. Trading activity during yesterday’s abbreviated holiday session was muted as traders took a wait-and-see approach amid the 47th president’s inauguration.

The White House issued a barrage of executive orders yesterday, taking aim at a swathe of hot-button issues, from immigration and citizenship to climate initiatives. A suite of actions targeting the energy industry were also executed as the president declared the US to be in a national energy emergency. The emergency declaration serves to free up the current administration to take additional steps to increase production and waive environmental restrictions. No word yet from oil producers on which one of them wants to start flooding the market and drowning their profits.

Right on time: the EIA published a note today with their 2025 oil price outlook, highlighting key findings published in their STEO on oil supply outpacing demand in the coming months. They also listed a handful of fundamental uncertainties such as OPEC+ production cut continuation (or dissension) and Chinese economic growth (or stagnation). Charts below.

Arguments can, and are, being made concerning the breadth, validity, and impact of the deluge of orders issued from the Oval Office yesterday, but what caused the biggest sigh of relief from the markets is the cooling on tariff talks. While a 25% tariff issued to Canada and Mexico on their exports to the US is still on the table, an order mandating them on Day 1™ didn’t come down, lending credibility to the idea that the threat of said tariffs are more political bluster rather than declaration of intent. S&P 500 futures are up about .4% so far this morning.

Winter storm Enzo is sweeping through the Gulf Coast region this morning, dropping snow in areas not used to receiving any. Houston schools and airports are shut down ahead of the severe weather while Lake Charles is under its first ever blizzard warning. No news yet on impacts to refineries in the region, although the speed of the storm (its supposed to stop snowing by about midday in Houston) and the quickly rising temperatures (highs in the 40s are expected tomorrow) will likely keep this from being a repeat of 2021.