⚡Any Meteorologists Out There?

March 13, 2025

Morning everyone,

CPI data came in a tad cooler than expected and markets breathed a sigh of relief.

Equity markets took a nice bounce on the news as it is thought that this may give the Fed the room it needs to cut rates at some point this year.

~Doug​

What's in this issue:

• Energy Market Recap

• Any Meteorologists Out There?

• Peak Oil Trade

• Headlines

Energy Markets

🛢️WTI ended the day higher by 2.16% as the EIA reported a build in inventories of 1.6 million barrels, just shy of the consensus estimate of 2.0 mm.

The build was uneven as Gulf Coast increased 4.0 million barrels while all of the other districts posted draws. Stocks at Cushing declined by 1.2 million barrels.

SWTI Spreads

Apr/May: +0.30
Jun/Dec: +2.43
Dec5/Dec6: +1.60

🔥Natural gas slid by 8.3% as weather demand (or lack of) caught up with the recent rally.

EIA inventory data due out later today.

Any Meteorologists Out There?

If you haven’t noticed, tracking weather is important in nat gas (and other commodities). This story out of Bloomberg shows just how much hedge funds value this knowledge:

“Hedge funds on average hired 23% more weather experts, including data scientists and meteorologists, in 2024 compared to a year earlier, according to executive search firm Proco Group. The average pay package has also increased by 18%, with the top talent getting as much as between $750,000 and $1 million.”

Any meteorologists out there?

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Peak Oil Trade

Jeff Currie, the oil analyst who brought us “Commodity Supercycle” back in the early 2000s while he was at Goldman Sacks, has now called for “Peak Oil Trade” as Chief Strategy Officer of Carlyle Group.

In his latest research note titled The New Joule Order, Currie argues that the age old peak oil argument now has a twist.

It isn’t declining demand or climate concerns that will bring about the energy transition, but energy security. He’s not saying fossil fuels are going away any time soon. After all, for places like the US, they are secure from trade disruption (to a point).

But the weaponization of finance and insurance against Russia, and now the tariff war, will accelerate moves to secure domestic, non-disruptable, energy sources.

As he puts it:

“Climate concerns, however, will not be the main driver of The New Joule Order. It will be driven by the quest for security, with nations creating a diversified energy mix of joules across multiple sources to insulate themselves (and investment portfolios) from geopolitical, macro, and financial risks.”

Headlines

“Record power demand and dizzying projections for electricity consumption for AI have made power generation and infrastructure assets, and companies which own them, attractive to energy companies, private equity and other institutional investors.”
+CERAWEEK ANALYSIS AI to fuel bumper year for M&A in US power sector - Reuters

“Brookfield Asset Management, the newly rebranded Aberdeen, the Bank of China and Macquarie will attend the two-day New Zealand Infrastructure Investment Summit to weigh up opportunities in a country that, by its own admission and the OECD’s, has long failed to welcome foreign investors.”
+Investors fly in as New Zealand pitches itself as ‘safe harbour’ - FT

“Continental’s overseas expansion marks a strategic departure for its founder Hamm, who was a prominent donor to President Donald Trump and has helped shape the administration’s policy of unleashing US energy dominance.”
+Harold Hamm’s Continental Resources expands into Turkey to develop oil reserves - FT

Economic Calendar

Monday -
Tuesday -
Wednesday - CPI, Crude Oil Storage Report
Thursday - Natural Gas Storage Report, Jobless Claims, PPI
Friday - Consumer Sentiment