Morning Bid: Happy new world order

• Crude prices tumbled with Brent closing below $60 per barrel on Wednesday due to expectations of increased oil supply; Venezuela has agreed to export up to $2 billion worth of oil to the U.S., largely displacing Chinese imports
• U.S. Gulf Coast refineries built to process heavy-grade crude are initial winners from the Venezuela developments, though reviving the country's oil industry could take years and billions of dollars in investment
• December non-farm payrolls data due Friday and a Supreme Court ruling on Trump's global tariffs are expected to be the biggest market movers, as investors await clarity on the labor market and trade policy

Market Summary: Geopolitical Shifts and Energy Market Implications

Key Developments:

The first trading week of 2025 was dominated by U.S. military action in Caracas and President Trump's comments on Greenland acquisition. Despite significant geopolitical developments, the S&P 500 closed essentially flat Thursday, though European defense stocks gained.

Venezuela Energy Impact:

The primary market focus centered on Venezuela's oil reserves—approximately 300 billion barrels, representing one-fifth of global stocks. Brent crude fell below $60/barrel Wednesday on expectations of increased supply. Venezuela has agreed to export up to $2 billion in oil to the U.S., redirecting flows previously going to China after 2019 sanctions.

U.S. Gulf Coast refineries built for heavy-grade crude processing are positioned as initial beneficiaries. However, revitalizing Venezuela's oil industry will require years and billions in investment despite Trump's claims of rapid development potential.

Labor Market Data:

November JOLTS data showed job openings declined while hiring remained weak. Private employment rose 41,000 in the latest month after a 29,000 November drop. The critical December non-farm payrolls report releases Friday with expectations for modest job gains, influencing Federal Reserve interest rate decisions.

Other Market Movers:

A major mining merger could create the world's largest mining company with nearly $207 billion combined market value. The Supreme Court is expected to rule Friday on Trump's global tariffs legality, potentially delivering the week's biggest market impact.

Market Implications:

Analysts suggest these developments signal a potential shift toward resource nationalism and changing global financial dynamics, with implications for dollar dominance and U.S. foreign policy priorities.