Author: Consultant

OPEC forecast on Wednesday world oil demand in 2026 will rise at a similar rate to this year, while reducing its figure for 2024 for a sixth time, following economic weakness in China, the world’s biggest importer of oil.

The 2026 forecast is in line with the Organization of the Petroleum Exporting Countries’ view oil use will rise for the next two decades, in contrast to the West’s International Energy Agency that predicts it will peak this decade as the world shifts to cleaner energy.

OPEC, in a monthly report, said demand will rise by 1.43 million barrels per day in 2026, a similar rate to the growth of 1.45 million bpd expected this year. The 2026 prediction is OPEC’s first in its monthly report.

“Transportation fuels are set to drive 2026 oil demand growth, with air travel expected to see continued expansion, as both international and domestic traffic continues to increase,” OPEC said in the report.

A table in the report put 2024 demand growth at 1.5 million bpd, compared with 1.61 million bpd listed in last month’s report, amounting to a sixth consecutive cut in the 2024 forecast. In July 2024, OPEC expected world demand would rise by 2.25 million bpd in 2024.

OPEC’s view on demand is at the upper end of industry forecasts. Earlier on Wednesday, the IEA forecast slower world oil demand growth in 2025 of 1.05 million bpd.

Statistics Canada says manufacturing sales rose 0.8 per cent to $71.5-billion in November, helped by higher sales in the aerospace product and parts industry group and the petroleum and coal product subsector.

The agency says production of aerospace products and parts rose 9.3 per cent to $2.8-billion in November, as production increased in all major aerospace manufacturing plants. Sales of petroleum and coal products increased 2.6 per cent to $8.0-billion.

Manufacturing sales in constant dollars were unchanged in November.

In a separate report, Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, fell 0.2 per cent to $83.7-billion in November.

The decrease came as the motor vehicle and motor vehicle parts and accessories subsector dropped 5.5 per cent to $14.0-billion.

In volume terms, wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, fell 0.5 per cent in November.

Top Republican officials at the U.S. Securities and Exchange Commission are poised to begin overhauling the agency’s cryptocurrency policies potentially as early as next week when President-elect Donald Trump takes power, said three people briefed on the matter.

Among the measures commissioners Hester Peirce and Mark Uyeda are weighing are initiating the process that would ultimately lead to guidance or rules clarifying when the agency considers a cryptocurrency to be a security, and reviewing some crypto enforcement cases pending in the courts, two of the people said.

Paul Atkins, Trump’s crypto-friendly pick for SEC chair and former agency commissioner, is widely expected to end a crypto crackdown led by President Biden’s Democratic SEC chair Gary Gensler, but it is unclear when the Senate will confirm him.

Gensler has said he will step down on Jan. 20 when Trump is sworn in.

As of next week, Peirce and Uyeda will hold the majority among the agency’s politically-appointed commissioners and are poised to get the ball rolling in the interim, the people said.

Like Atkins, the pair are crypto enthusiasts who have criticized Gensler’s tough stance on the industry and have in the past floated alternative crypto-friendly initiatives.

Peirce and Uyeda were aides to Atkins when he was at the SEC from 2002 to 2008 and the three have a good relationship, according to one of the sources and several other former SEC officials. The three have discussed potential crypto policy changes, said the sources who declined to be identified discussing private policy plans.

Peirce, Atkins and their representatives did not respond to requests for comment. A spokesperson for Uyeda did not respond to a request for comment.

Worried about fraud and market manipulation, Gensler’s SEC brought at least 83 crypto-related enforcement actions, suing multiple prominent companies like Coinbase and Kraken, agency data shows. In many cases, the SEC argued crypto tokens behave like securities and that the companies and their products should comply with SEC rules, although some allege fraud.

In the first few days of the new administration, the SEC is expected to begin a review of those court cases and potentially freeze some litigation that does not involve allegations of fraud, said two of the sources. Some of those cases could eventually be withdrawn.

Many of those defendants argue cryptocurrencies are more like commodities than securities and that it is not clear when SEC rules apply. They have called for the SEC to write new regulations which would clarify when a token is a security.

Peirce and Uyeda are expected to kick off the early stages of that rule-writing process, likely with a call for industry and public feedback, the two sources said.

Reuters and others have previously reported that the SEC is also likely to quickly rescind accounting guidance that has made it prohibitively costly for some listed companies to hold crypto tokens on behalf of third parties.

Trump, who courted crypto campaign cash with pledges to be a “crypto president,” is also expected to issue executive orders urging regulators to review their crypto policies, Reuters reported.

Bitcoin soared past $100,000 for the first time in December on excitement over the new crypto-friendly administration.

Still, even with a head start, reaching an agreement on crypto regulations could take months or longer, as could resolving complex enforcement actions that hinge on the definition of a security.

Dismissing dozens of enforcement actions would be unprecedented, and could set a risky precedent by politicizing the enforcement process, said Philip Moustakis, partner at Seward & Kissel and former SEC attorney.

In some cases, the court may object, said other lawyers.

One option for the agency would be to re-open settlement negotiations, said Robert Cohen, a partner at Davis Polk who previously worked in the SEC’s enforcement division.

Settlement talks, aimed at averting lengthy and public litigation, are the norm, but crypto companies say the SEC under Gensler has been unwilling to engage in substantive discussions.

Cohen added the new SEC leadership would likely continue to take a tough line on crypto fraud.

“I think the industry wants to see fraudsters or wrongdoers held accountable,” he added.

• JPMorgan Chase on Wednesday topped estimates for fourth-quarter revenue and profit.
• The bank was helped by better-than-expected net interest income and fixed income trading and investment banking results.
• Profit rose 50% to $14 billion in the quarter as noninterest expenses fell 7% from a year earlier.

JPMorgan Chase (JPM) earnings Q4 2024

The consumer price index, an inflation gauge, rose 2.9% on an annual basis in December 2024. That’s up from 2.7% in November. Energy, food, new and used vehicles, car insurance and airline fares were among the contributors to the increase. There was some good news: “Core” CPI saw disinflation, as did shelter prices.

Here’s the inflation breakdown for December 2024 — in one chart

Monday January 13

Japanese markets closed

China aggregate yuan financing, new yuan loans and trade surplus

(2 p.m. ET) U.S. budget balance for December.

Earnings include: Cogeco Inc.; Cogeco Communications Inc.

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Tuesday January 14

Japan bank lending

(6 a.m. ET) U.S. NFIB Small Business Economic Trends Survey for December.

(8:30 a.m. ET) U.S. PPI final demand for December. The Street is forecasting a rise of 0.3 per cent from November and up 3.6 per cent year-over-year.

Earnings include: OrganiGram Holdings Inc.

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Wednesday January 15

Japan machine tool orders

Euro zone industrial production

(8:30 a.m. ET) Canada’s manufacturing sales and new orders for November. The Street is projecting a month-over-month rise of 0.5 per cent and 1.0 per cent, respectively.

(8:30 a.m. ET) Canadian wholesale trade for November. Estimate is a decline of 0.5 per cent from October.

(8:30 a.m. ET) Canada’s new motor vehicle sales for November. Estimate is a year-over-year increase of 9.0 per cent.

(8:30 a.m. ET) U.S. CPI for December. Consensus is a rise of 0.3 per cent from November and up 2.9 per cent year-over-year.

(9 a.m. ET) Canada’s existing home sales and average prices for December. Estimates are year-over-year increases of 13.5 per cent and 2.0 per cent, respectively.

(9 a.m. ET) Canada’s MLS Home Price Index for December. Estimate is a flat reading year-over-year.

(2 p.m. ET) U.S. Beige Book is released.

Earnings include: Bank of NY Mellon; Citigroup Inc.; Goldman Sachs Group Inc.; JPMorgan Chase & Co.; Wells Fargo & Co.

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Thursday January 16

Euro zone trade surplus

Germany CPI

(8:15 a.m. ET) Canadian housing starts for December. Estimate is an annualized rate decline of 4.7 per cent.

(8:30 a.m. ET) U.S. initial jobless claims for week of Jan. 11. Estimate is 212,000, up 11,000 from the previous week.

(8:30 a.m. ET) U.S. retail sales for December. Consensus is a month-over-month gain of 0.5 per cent.

(8:30 a.m. ET) U.S. import prices for December. Estimate is a rise of 0.2 per cent from November and up 2.2 per cent year-over-year.

(10 a.m. ET) U.S. NAHB Housing Market Index for January.

(10 a.m. ET) U.S. business inventories for November.

(12:30 p.m. ET) Bank of Canada deputy governor Toni Gravelle speaks in Toronto.

Earnings include: Bank of America; Morgan Stanley; PNC Financial Services Group Inc.; PPG Industries Inc.; Richelieu Hardware Ltd.; Taiwan Semiconductor Manufacturing Co. Ltd.; Unitedhealth Group Inc.; U.S. Bancorp

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Friday January 17

China GDP, industrial production, retail sales and fixed asset investment

Euro zone CPI

(8:30 a.m. ET) Canadian international securities transactions for November.

(8:30 a.m. ET) Canada’s household and mortgage credit for November.

(8:30 a.m. ET) U.S. housing starts for December. The Street expects an annualized rate rise of 2.0 per cent.

(8:30 a.m. ET) U.S. building permits for December. Consensus is an annualized rate decline of 2.2 per cent.

(9:15 a.m. ET) U.S. industrial production and capacity utilization for December.

Earnings include: Schlumberger NV; State Street Corp.; Truist Financial Corp.

U.S. job growth unexpectedly accelerated in December while the unemployment rate fell to 4.1 per cent as the labour market ended the year on a solid footing, reinforcing the Federal Reserve’s cautious approach to interest rate cuts this year.

Nonfarm payrolls increased by 256,000 jobs last month after rising by a downwardly revised 212,000 in November, the Labor Department said in its closely watched employment report on Friday.

Economists polled by Reuters had forecast payrolls advancing by 160,000 jobs following a previously reported 227,000 surge in November. Estimates for December’s job count ranged from 120,000 to 200,000 positions added.

Hiring has slowed in the aftermath of the U.S. central bank’s hefty rate hikes in 2022 and 2023. Nonetheless, labour market resilience, mostly reflecting historically low layoffs, is powering the economy by supporting consumer spending via higher wages.

The economy is expanding at well above the 1.8 per cent pace that Fed officials regard as the noninflationary growth rate. Fears are, however, mounting that pledges by President-elect Donald Trump to impose or massively raise tariffs on imports and deport millions of undocumented immigrants could derail momentum.

Those worries were evident in minutes of the Fed’s Dec. 17-18 policy meeting published on Wednesday, which noted “most participants remarked that … the Committee could take a careful approach in considering” further cuts.

Average hourly earnings increased 0.3 per cent last month after gaining 0.4 per cent in November. In the 12 months through December, wages advanced 3.9 per cent after rising 4.0 per cent in November.

While business sentiment perked up following Trump’s Nov. 5 election victory on hopes of tax cuts and a less-stringent regulatory environment, economists do not expect a surge in hiring in the near term.

There have also been no signs in business surveys that companies are planning to boost head counts.

The fall in the unemployment rate was from 4.2 per cent in November.

The government revised the seasonally adjusted household survey data, from which the unemployment rate is derived, for the last five years.

Loosening labour market conditions have been underscored by steady rises in the number of people who have permanently lost their jobs, as well as the median duration of unemployment since September to a near three-year high of 10.5 weeks in November.

That is consistent with the Job Openings and Labor Turnover Survey, showing the hires rate falling back to levels seen early in the COVID-19 pandemic.

The Fed last month cut its benchmark overnight interest rate by another quarter-point to the 4.25 per cent-4.50 per cent range, bringing the total of reductions since it kicked off its easing cycle in September to 100 basis points.

But it projected only two quarter-point rate cuts this year compared to the four it had forecast in September, acknowledging the economy’s endurance and still-elevated inflation. The policy rate was hiked by 5.25 percentage points in 2022 and 2023.

Oil prices surged on Friday and were on track for a third straight week of gains as traders focused on potential supply disruptions from more sanctions on Russia.

Brent crude futures gained $2.50, or 3.3 per cent, to $79.42 a barrel by 1248 GMT, reaching their highest in more than three months. U.S. West Texas Intermediate crude futures advanced $2.39, or 3.2 per cent, to $76.31.

The United States will impose some of the harshest sanctions on the Russian oil industry to date, designating 180 vessels, dozens of traders, two major oil companies and some top Russian oil executives, a document seen by Reuters said.

The document, purported to be from the U.S. Treasury, was being circulated among traders in Europe and Asia. Reuters could not verify the veracity of the document.

Ahead of U.S. President-elect Donald Trump’s inauguration on Jan. 20, expectations have been mounting that President Joe Biden’s administration will tighten sanctions against Russia and Iran, at a time when oil stockpiles remain low.

“That would be the farewell gift of the Biden administration,” said PVM analyst Tamas Varga. Existing and possible further sanctions, as well as market expectations of draws on fuel inventories because of cold weather, are driving prices higher, he added.

The U.S. weather bureau expects central and eastern parts of the country to experience below-average temperatures. Many regions in Europe have also been hit by extreme cold and are likely to continue to experience a chillier than usual start to the year.

“We anticipate a significant year-over-year increase in global oil demand of 1.6 million barrels a day in the first quarter of 2025, primarily boosted by … demand for heating oil, kerosene and LPG,” JPMorgan analysts said in a note on Friday.

The premium on the front-month Brent contract over the six-month contract reached its widest since August this week, potentially indicating supply tightness at a time of rising demand.

Inflation worries are also boosting crude oil prices, Ole Hansen, head of commodity strategy at Saxo Bank, said. Investors are concerned about Trump’s planned tariffs, which could drive inflation higher. A popular trade to hedge against rising consumer prices is through buying oil futures.

Oil prices have rallied despite the U.S. dollar strengthening for six straight weeks, making crude oil more expensive outside the United States.

Canada’s economy added nearly quadruple the number of jobs forecasted for December and the unemployment rate surprisingly ticked down to 6.7 per cent, data showed on Friday, giving the central bank breathing room to determine the pace of further rate cuts.

The economy added a net 90,900 jobs last month, largely full-time work, according to Statistics Canada data. The job gains – third time in the past four months – were spread across several industries, the agency said.

Analysts polled by Reuters had forecast a net gain of 25,000 jobs and that the unemployment rate would rise to 6.9 per cent from the near eight year high of 6.8 per cent in November. In December, the unemployment rate fell for core-aged men and for men aged 55 and older.

The robust jobs data show the economy ended the fourth quarter on a high note, easing the pressure on the Bank of Canada to continue rapid rate cuts to spur growth.

The central bank slashed its key policy rate by 50 basis points last month to help address soft economic growth, bringing the cumulative lowering of the borrowing rate to 175 bps since June.

The bank, however, did indicate further rate cuts would be more gradual. Its next rate announcement is on Jan. 29, when money markets see a roughly 70 per cent chance of a 25 bp cut.

The average hourly wage growth for permanent employees slowed to an annual rate of 3.7 per cent from 3.9 per cent in November, Statistics Canada said. The closely-watched wage growth rate was the slowest since April 2022.

In further sign of the job market firming up, Canada’s employment rate, or the proportion of the population who are employed, increased for the first since January 2023 percentage.

Employment in the goods sector increased by a net 22,500 jobs, mostly in manufacturing. The services sector gained a net 68,400 jobs, led by educational services and transportation and warehousing.

Canada’s economic growth prospects have in recent months been clouded by the threat of tariffs from incoming U.S. President Donald Trump. On Friday, the statistics agency noted that 8.8 per cent of Canadian workers, or around 1.8 million people, in 2024 were in industries that were dependent on U.S. demand for Canadian exports.