Trump prepares broad energy plan to boost gas exports, oil drilling on day 1 – report

Crude oil futures fell sharply Monday, as the growing likelihood of a ceasefire deal between Israel and Hezbollah in Lebanon lowers the risk of a broader Middle East war that could impact global oil supplies.

Israel’s security cabinet will vote Tuesday on a ceasefire agreement, Israeli and U.S. officials said, and the cabinet is expected to approve the pact, according to reports.

The deal on the table reportedly includes a 60-day implementation period to allow the Israeli military to withdraw and for the Lebanese armed forces to secure the border area and prevent Hezbollah from re-establishing a presence there; an international committee along with United Nations peacekeepers would monitor compliance.

“It seems the news of a ceasefire between Israel and Lebanon is behind the price drop, though no supply has been disrupted due to the conflict between the two countries and the risk premium in oil has been low already before the latest price decline,” Giovanni Staunovo of UBS wrote.

Today’s losses followed last week’s biggest weekly gains since September after Russia fired a hypersonic missile at Ukraine following strikes by Ukraine on Russia using long-range missiles from the U.S. and U.K. for the first time.

Front-month Nymex crude (CL1:COM) for January delivery ended -3.2% to $68.94/bbl and front-month January Brent (CO1:COM) closed -2.8% to $73.01/bbl.

But U.S. natural gas futures reversed Friday’s losses as cold weather is seen extending into the first weeks of December; front-month Nymex December gas (NG1:COM) settled +7.7% at $3.369/MMBtu.

ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (USOI), (UNG), (BOIL), (KOLD), (UNL), (FCG)

President-elect Trump’s transition team is preparing a wide-ranging energy package to roll out within days of taking office that would increase oil drilling off the U.S. coast and on federal lands and lift the moratorium on liquefied natural gas export permits that was put in place by the Biden administration, Reuters reports.

Trump also plans to repeal some of Biden’s key climate legislation and regulations, such as tax credits for electric vehicles and new clean power plant standards that aim to phase out coal and natural gas, according to the report.

The biggest obstacle standing in the way of Trump’s desire for U.S. oil companies to “drill baby drill” could end up being some of his biggest supporters in the industry, who want help in locking in demand for their products, not pumping more fossil fuels, which they have little incentive to do.