1. Venezuela appoints Manuel Quevedo, a former housing minister with no known energy experience, to run the country’s deteriorated oil industry.
Venezuela's new energy minister will bring more military officials into the senior ranks of state oil company PDVSA as he looks to shake up the company and root out corruption. However, from the outside looking in, others are not onboard with the new minister and his appointment. Industry analysts and sources were surprised by the appointment of someone with no known energy experience, and feel it’s a bad omen for the country's already weakened oil industry.
Quevedo takes the reigns from two industry veterans and his road will not be easy. He will have to tackle corruption, scandals and figure out how to dig Venezuela out of it’s deep recession and debilitating U.S. sanctions.
2. OPEC meeting set for Thursday.
OPEC members and Russia are headed to Vienna for a meeting on Thursday – the main topic on the agenda will be whether to extend output cuts beyond March next year. Most are confident they will extend cuts, the question is becoming how long will they extend the cuts? Analysts believe the market is positioning for a nine-month extension from the deal's current expiration in March.
Russia is the wildcard in the equation. "If Russia is not willing to sign up again to extend the cut, people fear that we're going to get something shorter than anticipated," said Helima Croft, RBC Capital Markets' Global Head of Commodity Strategy.
3. Warm weather has natural gas prices lower than usual.
Natural gas prices have been trending down over the last couple months and reached a one-month low Friday. The main cause for lower prices are the forecasts for warmer-than-average temperatures across much of the U.S.
Based on trading from the past week, the market is now indirectly saying that they believe the risk of a cold winter is minimal at this point. Jan and Feb 2018 contracts are trading as if the warm temperatures we’re seeing for the first-week of December will persist.