The New Geopolitical Wildcard Is Venezuelan Oil
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Getty Images Good morning! Here is the latest in trending:Central banking: A pause may be coming, but the FOMC cut rates for third straight meeting amid growing dissent. The Dow reached the 48K level on the news, while yields fell as the Fed said it would start big monthly purchases of Treasury bills.Insider pick: Coca-Cola (KO) is hiring from within to replace longtime CEO James Quincey. He's set to step down from his role in March. Takeover battle: Members of Congress have told Warner Bros. (WBD) to file with CFIUS should it pick a foreign-backed bid. President Trump also said CNN should be sold as part of any deal. Crude on watch The United States' strategy when it comes to Venezuela is rapidly evolving from economic pressure to armed force. A sanctioned supertanker was just seized by American troops off the country's coast, with American commandos rappelling from helicopters and taking the boat by force. When asked what would happen to the oil onboard, President Trump replied, "We keep it, I guess," while issuing a separate warning to Colombia for "producing a lot of drugs." Chevron flies Venezuela staff to oil sites despite U.S. warningOperation Southern Spear: The U.S. military buildup in the Caribbean intensified at the end of the summer, and by September, airstrikes were already being conducted on small vessels that were identified as "narco-terrorists." In a cabinet meeting last week, Trump revealed that airstrikes would begin on land soon, after referring to the cartels as the "ISIS of the Western Hemisphere." While drug traffickers appear to be the No. 1 priority, the latest oil tanker seizure suggests there might be more at play, especially after Trump declared the days of Venezuelan leader Nicolás Maduro "are numbered."WTI crude futures (CL1:COM) initially climbed on the news, but quickly gave back those gains and are now down 1.5% to $57 per barrel. "Tensions are continuing to move up the escalation ladder and introduce some short-term supply risk," CIBC Private Wealth Group senior energy trader Rebecca Babin wrote in a research note. "That said, given the administration's clear desire to keep oil and gasoline prices contained, the market is only assigning a small risk premium. Any potential disruption is still being viewed as short-lived."Outlook: Shadow fleet shippers are likely to be more hesitant in dealing with Venezuelan crude going forward, which could be the beginning of a naval blockade around the country. It's also likely to hit hard, as crude accounts for the vast majority of export earnings for Venezuela, which has the world's largest proven oil reserves. Interestingly, the type of heavy, sour crude produced in Venezuela is the same type that's needed for many U.S. refineries, which has been in tighter supply, attributable in part to sanctions imposed on Russia. Why The U.S.
Cannot Use Its Own Oil Here's the latest Seeking Alpha analysis Scrooge: 5 Stocks That Could Ruin Your Santa Rally Overlooked Bargains Marvell Technology: Celestial AI Acquisition Is A Game ChangerNvidia: I'm Going All In Again If Alphabet Has Won, This Is The Consequence For Amazon What else is happening... Oracle's (ORCL) soaring RPOs not enough to offset mixed results.YouTube to launch TV plans in 2026, including a sports package.JPMorgan (JPM) gives up to $1K to employees earning under $80K.New frontier - Orbiting AI data centers; SpaceX IPO plan confirmed. U.S. set to buy Boeing (BA) 737s to expand deportation flights.Rivian's (RIVN) first-ever Autonomy and AI Day: What to expect.Waymo (WAYMO) reaches 14M rides this year, tripling from 2024.Here are the winners in the first U.S. Gulf oil lease sale since 2023.U.S. attorneys general warn AI companies over 'delusional' outputs.Automakers flag concerns over EU's proposed local sourcing rules. Today's Markets In Asia, Japan -0.9%. Hong Kong flat. China -0.7%. India +0.5%.In Europe, at midday, London +0.2%. Paris +0.4%. Frankfurt +0.1%.Futures at 6:30, Dow -0.2%. S&P -0.5%. Nasdaq -0.8%. Crude -1.5% to $57.56. Gold +0.4% to $4,242.60. Bitcoin -2.2% to $90,285.Ten-year Treasury Yield -1 bp to 4.14%.
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