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Navigating Energy Uncertainty

Hey Trader,

Navigating Uncertainty in Oil Markets Amid Geopolitical Developments

The oil market experienced notable volatility last week, influenced by rumors suggesting a ceasefire deal between Israel and Hamas. 

The initial dip, triggered by Qatari rumors shared by Al Jazeera, was followed by a quick recovery when the tweet was removed, and no official confirmation of the ceasefire emerged. The current market climate, highly sensitive to rumors, contributes to heightened fluctuations.

Adding to the geopolitical landscape, tensions with Iran escalated after three American soldiers' deaths at a Jordanian base. The U.S. attributed the attack to the Iran-backed Kata’ib Hezbollah, heightening concerns. 

While the U.S. plans targeted attacks on Iran proxies in Syria and Iraq, Kata’ib Hezbollah's suspension of attacks signals Iran's reluctance to escalate tensions into a full-blown conflict.

In Ukraine, the EU's decision to extend $54 billion in new aid faced resistance from Hungary. Additionally, Ukraine's move to replace its commander-in-chief introduces an element of uncertainty. 

Meanwhile, Venezuela-U.S. relations strained further as Maduro barred the opposition's presidential candidate, prompting the U.S. to reinstate some financial sanctions. A leaked memo revealing a DEA drug-smuggling investigation against Venezuelan leaders adds to the complex scenario.

In the energy sector, Phillips 66 surpassed Q4 profit expectations, attributing its success to robust refining markets and midstream performance. 

Marathon Petroleum reported strong Q4 net income, with a positive outlook for 2024 capital spending. Enterprise Products Partners marked a record increase in Q4 crude oil volumes, projecting growth capital investments and anticipating a U.S. license for its Sea Port Oil Terminal.

Permian Resources Inc. strategically divested $67 million of non-core assets in the Eagle Ford, subsequently acquiring valuable acreage in New Mexico's Eddy County. The company finalized an acreage trade, enhancing its position in Lea County, New Mexico.

China announced a significant oil discovery of 107 million tonnes in Henan province, potentially constituting a substantial portion of the country's total oil and gas production.

See you at the top,

Anthony Speciale

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