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First Look - Oil trades lower on strengthening US dollar

Oil is moving lower in thin pre-holiday trading as the US dollar strengthens
- The US dollar has continued to rally following the aversion of a US government shutdown
- Speculators have become more bullish on crude according to CFTC data, with managed money positioning moving higher last week
India to surpass China as the largest crude consumer
- India is projected to overtake China as the leading source of growth in global crude oil consumption in 2024 and 2025, according to the EIA
- India accounts for one-fourth of the global crude oil consumption growth.
- Chinese demand has been particularly weak this year as their economy falters

Nautral gas gapped higher in Sunday evening trading, with the January contract nearly touching $4/MMbtu
- By 8:00 AM CT, gas was back down near Friday’s settle of $3.73/MMBtu
- The reason for the volatility likely had to do with uncertainty on how much cold the weather models showed in the 13-15 day forecast window
- Many gas participants expected some move colder in the forecast between Friday and Today – leading to some of the price run-up observed late last week
- All in all, the two-week forecast added 10.2 HDDs from Friday to Today, according to The Commodity Weather Group
Possible halt to LNG exports from Qatar over Green Regulations (Oilprice and Financial Times)
- Qatar may halt LNG exports to Europe over new EU corporate sustainability directives, which are crucial for the EU's net zero efforts by 2050.
- Qatar threatens to stop LNG exports to the EU if corporate sustainability directive is strictly enforced.
- EU directive includes obligations for large companies on human rights and environmental protection.
- Non-compliance could result in fines of 5% of annual global revenues for companies.
- QatarEnergy, with 27-year LNG supply deals, warns strict enforcement could end EU business.
- “If the case is that I lose 5 percent of my generated revenue by going to Europe, I will not go to Europe . . . I’m not bluffing,” al-Kaabi, President of and CEO of QatarEnergy told FT.