OPIS Blog

Barron’s Energy Insider | In Partnership with OPIS | Video – January 20, 2025

Watch: Barron’s Senior Energy Writer Laura Sanicola and OPIS Chief Oil Analyst Denton Cinquegrana discuss what’s ahead for oil this week.

 

Barron's Energy Insider

Transcript:

LAURA SANICOLA: Hi, everyone. This is Laura Santicola, author of Barron’s Energy Insider, and I’m here this week with Denton Cinquegrana, chief oil analyst at OPIS. Thanks for being with me, Denton.

DENTON CINQUEGRANA: Thanks, Laura.

SANICOLA: Alright, Denton. Let’s talk about president Biden stepping up enforcement of oil sanctions on Russia right before he leaves office. This has sent oil futures to multi-month highs. What’s the practical effect on the oil market in your opinion?

CINQUEGRANA: Yeah. It’s a nice, I guess, parting gift from President Biden as President Trump takes office. But these are sanctions that have a little bit more teeth. You’re sanctioning, trading companies, ships, etcetera. It’s gonna make it a lot more difficult to get around these types of sanctions, and the market has taken notice. Prices have moved up, WTI right around 80 dollars a barrel. Brent, over 82-ish right now. So these sanctions do appear to have some teeth.

But, you know, on top of that, you have what’s basically should Russian barrels be taken out of the market? You know, it’s a global market at the end of the day. If there’s barrels not coming from some place, some place else is going to have to make up for it. This kind of feeds into our thesis that it’s gonna be a front loaded year because come April, you’re supposed to have OPEC+ kinda releasing some of those barrels that they cut. And with prices in the low 80s, high 70s, I think this is a little bit more accommodative for them to release more barrels onto the market.

SANICOLA: Obviously, this week, we have a new administration coming into office in the White House. Is President-elect Trump expected to continue Biden’s sanctions or strengthen them, weaken them? What do you think?

CINQUEGRANA: Well, I think these sanctions were, like I said, a parting gift, but, also, they kinda and this is my own personal opinion, but they kinda put Trump in a box a little bit early in his administration. One, he’s promised to cut prices for energy, cut prices for gasoline. This is gonna make that a lot more difficult when price when oil prices are above 80 dollars a barrel. At the same time, if he does loosen up the sanctions, he does look a little bit like Putin’s putt a bit. And if there’s something we’ve learned about President Trump is that he likes the image. So he does not I don’t believe would want that kind of, you know, image kinda hanging over his head. So he’s kinda got painted into a bit of a corner early on. Again, this is my own personal opinion, but I don’t know if he’ll loosen up those sanctions. But at the same time, with prices being higher, we’ve heard about US energy dominance. This kinda makes that path a little bit easier as well.

SANICOLA: Here at Barron’s Energy Insider, we’re also watching whether, Trump ends up enacting 25 percent tariffs on Canadian oil. Is there anything else you’re watching for this week or next?

CINQUEGRANA: Yeah. That’s the interesting thing. And recently, president Trump, president-elect Trump, I should say, met with the premier from Alberta. And according to quotes from the premier, he’s like, yeah, this is gonna happen. So it’s gonna make a it’s gonna have see things move around quite a bit. It’ll be interesting to see how they’re implemented. Will it be 25 percent all at once? Will it be in pieces? So that’s what the market’s kinda waiting for. And quite simply, we just don’t know right now.

SANICOLA: Right. Well, we’ll certainly be watching that in the coming weeks. So thanks again, Denton, for joining me, and we’ll see everybody next week.

Tags: Crude oil, Energy Insider