November 21, 2024 | Crude Oil War Premium Expands As Ukraine Fires Longer Range US Missiles Into Russia

President elect Trump is moving quickly to nominate his cabinet full of loyalists that want to reign in the size and power of the perceived swamp in Washington. Many of his nominees are being readily accepted but one for Attorney General is getting widespread condemnation. He has nominated strong people for State, Defence, HHS, Interior and Energy and these individuals once confirmed will be taking scyths to their departments to cut wasteful spending and to remove the neo-conservative culture that is the deep state. It would not surprise me to see the regulations reviewed and if seen as intrusive and not to the benefit of Trump’s ‘America First’ policy, terminated.

President Biden and his neo-cons want to hamstring/hobble the incoming administration by sending more aid to Ukraine and have now allowed Ukraine to fire longer range missiles into Russia. These weapons provided by the US were allowed only for defensive purposes but now for offense. The missile range of these ATACMS missiles is 300 KM’s whereas prior approved weapons had a range of 150 KM’s. These weapons destroyed a military weapons depot deep in Russia. Putin is furious and has loosened the threshold to use nuclear weapons. With the war now just over 1,000 days, and with President Trump re-entering office on January 20th,  hamstringing Trump seems to be Biden’s good-bye gift to Trump’s desire for a diplomatic solution. Russia sees this as a “qualitatively new phase of Western war against Russia”.

Some other items on this war front are:

• The US has closed its embassy in Kiev as it expects a significant attack by Russia before Inauguration day.
• Russia changed its nuclear weapons use with a new doctrine allowing for potential use of a conventional attack on Russia by any nation that is supported by a nuclear power (US & UK for example).
• A vital undersea communication cable from Finland to Germany was cut in an act of sabotage. Is this a prelude to a new expanded war phase?
• Russia now has 50,000 troops (including 10,000 North Korean soldiers) ready to destroy or chase out the Ukrainian forces that invaded the Russian area of Sumy. Putin wants this won before Trump enters office so he is in a better bargaining position for a diplomatic solution. This winter offensive should start shortly. North Korea has added long range artillery pieces to their forces for this battle.

Economic, Stock Market Update:

Some of the interesting economic and market data points over the last week are:

• China is seeing some green shoots on the export side while the domestic economy stays weak. Exports rose 12.7% in October, however Imports fell 2.3%
• Singles day shopping in China saw sluggish sales as consumers save as they see rising unemployment and more layoffs.
• US Core CPI rose 3.3% above last year making a rate cut in December questionable now. The major increases came from higher rents (up 5%), higher airfares (up 8%), and food (up 4%).
• Economists are predicting which countries will be hurt by incoming Trump tariffs. Mexico, China, Vietnam  and Canada top the list. We will discuss the impact on Canada during our upcoming webinar on November 28th. 
• US Retail Sales rose 0.4% in October better than the 0.3% expected.

Josef Schachter November 21st, 2024

Posted In: Schachter's Eye On Energy

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