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Is the oil market heading for a supply crunch? (0:30) Search giant Google to lay off more workers (1:30) and Boeing shares fall after collision at O’Hare (2:10).
This is an abridged transcript of the podcast:
During the World Economic Forum in Davos, Switzerland, Occidental Petroleum (NYSE:OXY) CEO Vicki Hollub cautioned about the potential for a supply crunch in the global oil market starting in 2025 if exploration activities fail to meet demand.
Hollub pointed out that U.S. oil companies have shifted focus from exploration to tapping shale oil reserves, which have a shorter lifespan. This strategic shift could lead to an extended period of increased demand outstripping supply.
Analysts at ING indicated that escalating tensions in the Middle East pose supply risks for crude oil and liquefied natural gas, but fundamental impact on supply is not yet evident. They emphasized that significant escalation or a meaningful loss in oil supply is necessary to drive oil prices significantly higher.
Google (NASDAQ:GOOG) (NASDAQ:GOOGL) announced that it will be laying off several hundred workers from its advertising sales division as part of a strategy to revamp its sales team operations.
Furthermore, Boeing (NYSE:BA) shares took a hit after a collision at Chicago’s O’Hare International Airport between a Delta Airlines (DAL) plane and an All Nippon Airways (OTCPK:ALNPY) plane, as investigated by the Federal Aviation Administration. No injuries were reported, and passengers disembarked safely.
Investors witnessed U.S. indexes closing lower on Tuesday, influenced by increasing yields and Federal Reserve Governor Waller’s comments hinting at a less aggressive interest rate cut, which mirrored similar statements made by European Central Bank officials.
U.S. crude oil futures closed lower on Tuesday due to concerns about demand shortfalls outweighing potential supply shortages from Middle East tensions, while the U.S. dollar surged to a one-month high as expectations of a Federal Reserve interest rate cut in March diminished.
Additionally, Asia-Pacific stocks fell on weak China data, with ongoing challenges such as sluggish consumer spending and a decline in the real estate sector impacting the economy’s anticipated growth in Q4.
The day ahead promises the release of US retail sales data and further insights from Fed officials for investors to gauge the monetary policy outlook.
Prior to the opening bell, stock index futures indicated a lower start to the day, with S&P futures (SPX) -0.4%, Dow futures (INDU) -0.4%, and Nasdaq 100 futures (NDX:IND) down -0.6%, while the 10-year Treasury yield (US10Y) decreased by 1 basis point to 4.06%.
Rumble’s (NASDAQ:RUM) stock surged over 7% after former President Donald Trump’s significant victory in the Iowa caucuses, driving speculation that Rumble is a conservative alternative to YouTube.
Spirit Airlines’ (NYSE:SAVE) shares suffered a 5% drop following a federal judge’s block of the planned $3.8B sale to JetBlue Airways (NASDAQ:JBLU) on antitrust grounds. According to a TD Cowen analyst, Spirit Airlines (SAVE) may explore alternatives following this decision.
Chinese electric vehicle (EV) stocks, including XPeng, NIO, and Li Auto, experienced declines amid pricing competition and downward revisions in sales forecasts, with NIO reaching a new 52-week low in the last session.
Today’s economic calendar includes the release of retail sales data, with economists expecting a 0.4% rise in the headline number, while core retail sales are anticipated to increase by 0.2% on the month.
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