Three US Service Members Killed in Jordan
January 29, 2024
The news over the weekend was that 3 US service members were killed and up to 34 were injured in the Jordan due to a drone strike linked to Iran. President Bien said the US will respond at the appropriate time. These actions by Iran have stirred things ups and there are many calling for retaliation. Others say the US needs to continue their strategy, but the bottom line is this seems to have raised the bar and the conflict in the Middle East is not going away and the likelihood of escalation now seem more probable.
There was an attack on Friday on a vessel in the Red Sea and it was a tanker linked to the trade-house Trafigura, that was carrying refined products. This is the first direct impact on energy in these Red Sea attacks. It did bring some buyers into the market and added to the risk premium.
China large property giant management group Evergrande Group was ordered to liquidate. This is not a good sign for China’s economy and anytime there is bad economic news about China is lowers the outlook for energy demand.
Cushing, OK crude oil inventories have been going down the last few weeks and some traders are now cautioning about a short squeeze on NYMEX WTI crude oil futures because of these stock declines. Cushing, Ok is the physical delivery point for the NYMEX WTI Futures contract. Cushing stocks were report last week at 30.066 million barrels, last year there were 35.694 million barrels, and the three-year average is 39.205 million barrels.
Baker Hughes reported that oil rigs were up by 2 to a total of 499.
Friday also had a lot of positive economic data which also helped to support the strong rally on Friday.