Oil Prices Climb as US Blocks Venezuelan Tankers, Eyes on Russia-Ukraine Talks

Commodity

Political

Summary:

Uncertainty over how the U.S. would enforce Trump's intent to block sanctioned tankers from entering and leaving Venezuela tempered geopolitical risk premiums.

Oil prices edged up on possible disruptions from a U.S. blockade of Venezuelan tankers as the market waits for news about a possible Russia-Ukraine peace deal.

Brent futures rose 65 cents, or 1.1%, to settle at $60.47 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 51 cents, or 0.9%, to settle at $56.66.

That put Brent and ‌WTI down about 1% this week after both crude benchmarks fell about 4% last week.

In other energy markets, a recent drop in U.S. gasoline futures to a four-year low ‌cut 321- and gasoline crack spreads, which measure refining profit margins, to their lowest since February.

"The (oil) complex is posting small gains in holding above lows established earlier this week as it awaits further guidance regarding Ukraine/Russian peace talks as well as fresh headlines out of Venezuela as to the potential impact of the apparent Trump tanker blockade," analysts at energy advisory firm Ritterbusch and Associates said in a note.

As U.S. President Donald Trump seeks an ⁠end to Europe's deadliest conflict since World War Two, ‌Russian President Vladimir Putin said the onus was on Ukraine and Europe to make the next move toward peace.

European Union leaders decided on Friday to borrow cash to loan 90 billion euros ($105 billion) to Ukraine to fund ‍its defense against Russia for the next two years rather than use frozen Russian assets, sidestepping divisions over an unprecedented plan to finance Kyiv with Russian sovereign cash.

Putin offered no compromise on Friday on his terms for ending the war in Ukraine and accused the European Union of attempting "daylight robbery" of Russian assets.

Ukraine, meanwhile, struck a Russian "shadow fleet" oil tanker in the Mediterranean Sea with aerial drones for the first time, an official said on Friday, ‌reflecting the growing intensity of Kyiv's attacks on Russian oil shipping.

VENEZUELA BLOCKADE

U.S. Secretary of State Marco Rubio on Friday told reporters that the United States is not concerned about an escalation with Russia when it comes to Venezuela, as the Trump administration builds up military forces in the Caribbean.

Trump told NBC News in an interview that he was leaving the possibility of war with Venezuela on the table.

Uncertainty over how the U.S. would enforce Trump's intent to block sanctioned tankers from entering and leaving Venezuela tempered geopolitical risk premiums, IG analyst Tony Sycamore said.

Venezuela, which pumps about ⁠1% of global oil supplies, on Thursday authorized two unsanctioned cargoes to set sail for China, said two sources familiar with Venezuela's oil export operations.

A sanctioned tanker carrying some 300,000 barrels of naphtha from Russia entered Venezuelan waters late on Thursday, while three others also under sanctions either stopped navigation or began redirecting course in the Atlantic Ocean, ship tracking data showed.

The U.S. on Friday imposed sanctions ‍on family members and associates of ⁠Nicolas Maduro and his wife, as Washington ratchets up pressure on the Venezuelan president.

U.S. PRODUCTION WORRIES?

The rig count in the Permian Basin in West Texas and eastern New Mexico, the biggest U.S. oil-producing shale formation, fell by three this week to 246, the ⁠lowest since August 2021, according to data from U.S. energy services firm Baker Hughes.

The rig count is an early indicator of future output. A lower count can point to ‌a decline in future output.

Source: Reuters

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Manuel

Energy

Political

Georgia's only private electric utility plans to increase power capacity by 50% after state regulators on Friday agreed 5-0 that the plan is needed to meet projected demand from data centers.

It would be one of the biggest build-outs in the U.S. to meet the insatiable electricity demand from developers of artificial intelligence. The construction cost would be $16.3 billion, but staff members say customers will pay $50 billion to $60 billion over coming decades, including interest costs and guaranteed profit for the monopoly utility.

Georgia Power Co. and the Public Service Commission pledge large users will more than pay for their costs, and that spreading fixed costs over more customers, could help significantly cut residents' power bills beginning in 2029.

“Large energy users are paying more so families and small businesses can pay less, and that’s a great result for Georgians,” Georgia Power CEO Kim Greene said in a statement after the vote.

But opponents say the five elected Republicans on the commission are greenlighting a risky bet by the utility to chase data center customers with existing ratepayers left holding the bag if demand doesn't materialize.

“The need for 10,000 megawatts of new capacity resources on the system in the next six years isn’t here," said Bob Sherrier, a lawyer representing some opponents. “It just isn't, and it may never be.”

The approval came less than two months after voters rebuked GOP leadership, ousting two incumbent Republicans on the commission in favor of Democrats by overwhelming margins. Those two Democrats won in campaigns that centered on six Georgia Power rate increases commissioners have allowed in recent years, even though the company agreed to a three-year rate freeze in July.

Peter Hubbard and Alicia Johnson — the Democrats who will take office Jan. 1 — opposed Friday's vote. But current commissioners refused to delay.

Electric bills have emerged as a potent political issue in Georgia and nationwide, with grassroots opposition to data centers partly based on fears that other customers will subsidize power demands of technology behemoths.

Georgia Power is the largest unit of Atlanta-based Southern Co. It says it needs 10,000 megawatts of new capacity — enough to power 4 million Georgia homes — with 80% of that flowing to data centers. The company has 2.7 million customers today, including homes, businesses and industries.

Whether the company’s projections of a huge increase in demand will pan out has been the central argument. Georgia Power and commission staff agreed Dec. 9 to allow the company to build or acquire all the desired capacity, despite staff earlier saying the company's forecast included too much speculative construction.

In return, the company agreed that after the current rate freeze ends in 2028, it would use revenue from new customers to place “downward pressure” on rates through 2031. That would amount to at least $8.50 a month, or $102 a year, for a typical residential customer. That customer currently pays more than $175 a month, including taxes.

"So we’re taking advantage of the upsides from this additional revenue, but allow it to shift the downside and the risk over to the company. And I’m real proud of that," Commission Chairman Jason Shaw said after the vote.

But “downward pressure” doesn't guarantee a rate decrease.

"It doesn’t mean your bills are going down," said Liz Coyle, executive director of consumer group Georgia Watch. “It means that maybe they’re not going up as fast.”

Existing customers would pay for part of the construction program that doesn't serve data centers. More importantly, opponents fear Georgia Power's pledge of rate relief can't be enforced, or won't hold up over the 40-plus years needed to pay off new natural-gas fired power plants.

In a Monday news conference, Hubbard likened it to a mortgage “to build a massive addition to your home for a new roommate, big tech.”

"If in 10 years, the AI bubble bursts or the data centers move to a cheaper state, then the roommate moves out, but the mortgage doesn’t go away,” he said.

Staff members say the commission must watch demand closely and that if data centers don't use as much power as projected, Georgia Power must drop agreements to purchase wholesale power, close its least efficient generating plants and seek additional customers.

Many opponents oppose any new generation fueled by natural gas, warning carbon emissions will worsen climate change. Some opponents were escorted out of the commission meeting by police after they began chanting “Nay! Nay! Nay! The people say nay!”

“Increased natural gas output for the sake of these silicon billionaire kings seems like a lose-lose," opponent Zak Norton told commissioners Friday.

Source: AP

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Manuel

Economic

Home sales notched their third straight month of gains in November, though 2025 sales are likely to finish the year at a 30-year low.

Existing home sales rose 0.5% from October to a seasonally adjusted annual rate of 4.13 million, according to National Association of Realtors data released on Friday. Lower mortgage rates were likely a boost: Homes sold in November typically went under contract during September or October, around when mortgage rates began holding steady near year-to-date lows of 6.2%.

“The low mortgage rate conditions of this autumn compared to the early part of the year is clearly helping some of the affordability conditions,” said NAR chief economist Lawrence Yun.

Although home sales have improved in recent months, the housing market is still in a deep slump stemming from high prices, elevated mortgage rates, and consumer unease. Home sales for the year are on track to be the lowest since 1995, and November’s improvement was below the 1.2% gain analysts had been expecting.

Sales rose month over month in the Northeast and South, while they were flat in the West and dropped in the Midwest. Compared with a year earlier, sales are down 1%.

The winter months typically bring a seasonal slowdown in sales activity. Housing inventory dropped 5.9% to 1.43 million units last month compared to October, but it’s still a 7.5% improvement from November 2024.

Next year, the health of the labor market and trends in inflation will be key influences on the market, Selma Hepp, chief economist at Cotality, said in a statement.

“A rebound in the housing market hinges on a solid labor market, income growth, and economic resilience amid the continued affordability crisis, elevated mortgage rates, and consumer discontent,” Hepp said.

Source: Yahoo Finance

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Manuel

Forex

Cryptocurrency

The EU Council on Friday backed a negotiating position for a digital euro that includes both online and offline functionality, diverging from earlier European Parliament proposals that focused solely on offline usage.

Under the Council's new position, the digital euro would ‌be publicly issued by the European Central Bank and usable anytime, anywhere, whether users are connected to the internet or offline.

Fernando ‌Navarrete, the European Parliament rapporteur for the digital euro, had advocated for an offline-only model to preserve users' privacy and the resilience of the unit itself, with the central bank to operate as the currency's regulator.

Online transactions would involve immediate processing through the central bank's ledger or through authorised intermediaries, while offline transactions can ⁠be recorded locally and later synchronised ‌with the central ledger when connectivity resumes, meaning the system can be used even in areas with poor connectivity while preserving cash-like privacy for its users.

The ‍ECB is working to introduce a digital euro to modernise its payment system and ensure central bank money remains relevant in an increasingly digital world. With cash use declining, a central bank-issued digital currency would help maintain monetary sovereignty and trust in the currency.

The project, however, is advancing slowly and faces resistance from portions of ‌the banking sector.

Council ministers endorsed offline usability for everyday flexibility and resilience in case of power outages. But they also included online access to support a broader set of digital payments.

The Council's mandate sets out key design features, including limits on digital euro holdings to prevent it from endangering financial stability by draining away deposits from banks.

These ceilings will be determined by the ECB, subject to an overall cap ⁠reviewed every two years.

Providers must offer certain basic digital euro services free of charge, though fees will apply for value-added features.

A transition period of at least five years will cap interchange and merchant fees at levels in line with existing payment methods, with fees adjusted afterward based on ‍actual costs.

The Council's agreement ⁠clears the way for negotiations with the European Parliament on the legal framework for the digital euro. The Council, formally called the Council of the European Union, represents EU member states' governments, and ⁠it works alongside the European Parliament to adopt laws.

Once that is adopted the ECB can proceed to issue the digital ‌euro, which it has said could be operational by 2029 after a pilot phase ‌in 2027.

Source: Reuters

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Manuel

Stocks

Political

Nvidia stock (NVDA) jumped as much as 3.8% in Friday trading following a Reuters report that the Trump administration began its review of Nvidia H200 chip exports to China and news that US antitrust agencies cleared Nvidia's investment into Intel (INTC).

The move higher put shares of the world's largest company on track for a weekly gain, as investors viewed the news as a sign that President Trump would follow through on his promise to allow Nvidia to sell advanced chips to China in exchange for a 25% fee to the government. Nvidia Stock Gains on Trump Chip Export Review, Sparking Rally in Chipmakers_1

Nvidia Stock Gains on Trump Chip Export Review, Sparking Rally in Chipmakers_1

According to Reuters, the US Commerce Department sent license applications for the sale of Nvidia's advanced chips to the State, Energy, and Defense Departments, which will weigh in on the potential chip exports over the next 30 days.

Nvidia has been pushing for the Trump administration to approve its advanced chip exports to China for months, which would expand access to a crucial market for the business.

But some on Wall Street have noted that lifting chip export restrictions for China still faces hurdles. National security experts have warned that granting China access to America's leading chip technology could diminish the US's lead in artificial intelligence.

There's also the question of whether China would accept the chips. In April, Trump similarly banned the exports of Nvidia's H20 chips to China before reversing that decision in July. However, Beijing told the country's tech companies not to purchase the chips due to national security concerns.

Still, the report that the Trump administration was moving forward on its pledge to allow the chip exports sparked a rally in other chipmakers and chip developers as the broader tech trade revived.

Nvidia stock also rose to session highs after the Federal Trade Commission issued a notice clearing Nvidia's $5 billion investment in Intel, which sent that company's shares 3% higher.

Meanwhile, Advanced Micro Devices (AMD) climbed over 5.6%. Broadcom (AVGO) rose as much as 2.5%. And Micron (MU) stock rose 6% as investors extended their post-earnings buying spree after Thursday's 10% gain.

Source: Yahoo Finance

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Justin

Economic

Markets to go into hibernation

The festive period officially starts next week, with many traders vacating their desks until the first full week of January, making way for thin trading volumes and very few top-tier releases. However, plenty of action is expected in the first full week of January 2026 when the US jobs report returns to its usual schedule.

But what are the risks of volatility episodes such as flash crashes or geopolitical flare-ups during these quiet days when any sudden moves could be amplified due to extremely low liquidity?

Holiday lull or a new crisis?

With tensions elevated between the US and Venezuela, further escalation is possible. President Trump could decide to take more action over the country by expanding the military strikes on drug traffickers at sea to Venezuelan land – something he's already warned about. The US this week imposed a blockade of all sanctioned oil tankers from entering or leaving Venezuela and Trump could well decide to pile yet more pressure on President Madura.

Fresh tensions would probably boost oil prices and to a lesser extent Gold.

There's also a danger of panic selling on Wall Street if AI jitters persist. Equity markets haven't staged much of a Santa rally this year despite expectations of more Fed rate cuts. But whilst some valuations are clearly overstretched, the AI revolution is only beginning, hence, new winners could enter the scene just as others unexpectedly become losers in the race.

Still, this year's slightly prolonged duration of holiday-thin liquidity increases the risk of a negative AI-related headline triggering a new round of selloff in tech stocks if fresh doubt is cast on valuations.

Major decisions awaited at start of 2026

However, investors on the whole will probably prefer to stay on the sidelines, as they await two key decisions in early January. First, the US Supreme Court will deliver its ruling on Trump's tariffs, ending months of uncertainty about whether most of the levies announced since April are legal or not. However, a ruling against the tariffs may not necessarily be the best outcome, as this could worsen the uncertainty and potentially cost the US government billions if it's forced to refund the tariff revenue to businesses.

The other big decision is who President Trump will nominate to head the Federal Reserve when Jerome Powell's term ends in May 2026. Given that Trump keeps changing his mind and there's a new favourite on a weekly basis, a surprise choice cannot be ruled out. Moreover, picking someone who can achieve consensus within a split FOMC will be crucial. Nevertheless, whoever Trump selects, the new Fed chair will almost certainly be more dovish than Powell, so the announcement is possibly a low-risk event for the markets.

US data to keep markets on edge

Switching the focus to economic data now, the US agenda is by far the busiest. The advance GDP reading for Q3 is the first highlight next week. Due on Tuesday, the report is expected to show that the US economy grew by a solid annualized rate of 3.2% in the third quarter, somewhat slower than the 3.8% seen in Q2. Durable goods orders for October and the latest consumer confidence index are also out the same day.

On Tuesday, December 30, the Fed will publish the minutes of its December policy meeting. With not a whole lot of Fed speakers out and about during the Christmas and New Year period, the minutes will be scrutinized for any clues on the timing of the next Fed rate cut, as well as to see how strong the inflation concerns still run among the policymakers that voted to keep rates on hold.

Moving into January, things will begin to heat up as the ISM manufacturing PMI for December is out on Monday, January 5, followed by the JOLTS job openings, the ADP employment report and ISM services PMI on Wednesday.

NFP report to kickstart the new year

Most important of all, the December jobs report will be released without any delay on Friday, January 9. After the mixed payrolls figures and the much softer-than-expected CPI report for November, any further weakness in the labour market in December would fuel expectations of a January rate cut.

In particular, if the unemployment rate, which hit a four-year high of 4.6% in November, continues to rise, the Fed hawks will find it increasingly tough to defend their stance.

Finally, the University of Michigan's preliminary consumer sentiment survey for December will also get published on Friday.

For the US dollar, the ISM PMIs and NFP data are likely to have the biggest impact. The risks for the greenback are currently tilted to the downside so a bad set of prints could exacerbate any selling pressure.

Employment numbers are also due in Canada on January 9. The Canadian dollar's mini rally versus the greenback paused for breath during the past week after the weak November CPI prints. But an upbeat labour market report could recharge the bulls.

Will Tokyo CPI matter after BoJ's latest move?

As most traders wind down over the long Christmas weekend, it will be business as usual in Japan. December CPI data for the Tokyo region is out on Friday, December 26, along with the November readings for industrial production, retail sales and unemployment.

Following the Bank of Japan's rate hike in December, the focus is now on how soon the next increase will come. The BoJ will publish the Summary of Opinions of that meeting on Monday, December 29, but before that, any uptick in inflationary pressures could lift BoJ rate hike odds, boosting the yen.

Similarly, investors may want to watch wage growth and household spending numbers that are scheduled for January 8 and 9, respectively.Australian CPI eyed for RBA clues

Elsewhere in Asia, Chinese manufacturing PMIs out on New Year's Eve and January 2 might attract some attention for the Australian dollar. But aussie traders will mainly be keeping their eyes on domestic November CPI data due on Wednesday, January 7.

Although the Reserve Bank of Australia is unlikely to announce any changes in policy at its next meeting in February, any fallback in monthly CPI, which unexpectedly jumped to 3.8% y/y in October, could push back the timing of a potential rate hike, weighing on the aussie.Euro and Pound might shrug off the data

In Europe, it will be extremely quiet apart from Q3 GDP figures out of the UK this Monday, and the Eurozone's flash CPI estimate for December on Wednesday, January 7.

With both the Bank of England and European Central Bank having just held their last policy decisions of the year, neither release is likely to move the euro and pound.

The ECB is firmly on pause at least until the middle of 2026, while any disappointing growth numbers for the UK may not be enough to significantly alter the BoE rate outlook after the Bank delivered a surprise hawkish cut.

Source: XM

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Devin

Economic

Canada's gross domestic product report for October on Tuesday will mark Statistics Canada's final major data release of 2025, and we anticipate a 0.2% decline in growth.

It's slightly higher than StatsCan's preliminary estimate released a month earlier for a 0.3% contraction. If October's decline is realized, it would represent the steepest monthly drop in GDP since February.

Still, early indicators such as hours worked and our tracking of consumer spending suggest a possible recovery in November. We continue to expect a soft 0.5% annualized increase in GDP for Q4.

In October, we see weakness mostly from goods-producing sectors, while output among service industries remained essentially unchanged.

Non-conventional oil production in Alberta contracted sharply (-5%) in October after four consecutive months of expansion. Manufacturing output declined as well, partially reversing September's gains. StatsCan's October mineral production data indicated modest recovery in mining output, following declines in the prior two months, helping to cushion some weaknesses in other sectors.

For services, home resales rose 0.8% month-over-month in October, bolstering real estate activity. Arts and entertainment saw a boost from the Blue Jays' playoff run, although the gain was likely reversed quickly in November. Offsetting stronger activities was the Alberta's teacher strike temporarily weighing on education services. Wholesale and retail volumes also fell, by 0.7% and 0.6% respectively.

Early November indicators suggest signs of stabilization. Hours worked increased a larger 0.4%, and our tracking of RBC consumer spending data indicates continued strength, especially in discretionary purchases as the holiday shopping season ramps up. This is consistent with StatsCan's advance retail indicator, which shows sales rebounded by 1.2% in November. Overall, we continue to expect modest growth in Q4.

Week ahead data watch:

Delayed Q3 U.S. GDP report will be released on Tuesday after the U.S. government shutdown. We look for headline GDP growth of an annualized 2.5% quarter-over-quarter—a deceleration from Q2's 3.8%. Much of Q3's expansion was driven by household consumption, particularly within services. Excluding volatile net trade, final domestic demand likely remained resilient, albeit growing slightly slower than in Q2.