Daily Brief Energy/Materials: Crude Oil, SGX Rubber Future TSR20, BP PLC, TotalEnergies , West China Cement, Iron Ore, TMC the metals co, Rio Tinto PLC and more

• Oil markets in 2024 experienced slow supply and demand growth after years of high volatility
• Heading into 2025, demand is reaccelerating faster than supply, leading to a bullish outlook
• With low inventory levels and a modest supply deficit expected, prices are likely to gradually rise to low 80s Brent basis

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• Rubber production in December suffers a loss of 30%  
• Yokohama Rubber plays Good Samaritan in hour of crisis  
• CMO enabling FSC Certification for Thai rubber for EUDR

• Trump prioritizes reducing US trade deficit by urging nations with trade surpluses to increase oil and gas purchases or face tariffs
• To reduce bilateral deficits, US would need to significantly increase oil and gas exports to Europe, China, South Korea, and Japan
• Trump administration aims to accelerate US oil and gas production growth to meet demand and potentially lower costs for producers to achieve goals of reducing trade deficit and increasing energy exports

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• The U.S. oil and gas rig count rose for the first time in eight weeks, as it rose by 6 to 582 for the week ending 31/Jan.
• For the week ending 24/Jan, U.S. oil production fell to 13.24m bpd from 13.48m bpd the week prior.
• The number of active U.S. oil rigs rose by 7 to 479 while gas rigs dropped by 1 to 98. U.S. producers added four rigs in New Mexico.

• BP’s Q4 revenue and EPS are expected to fall by 10% YoY and 57%, respectively. For 2024, revenue is projected to drop 8.2% while EPS is estimated to fall 30.3%. 
• BP anticipates weaker refining margins and higher turnaround activity to impact profits by USD 100–300 million QoQ, with oil trading performance also expected to decline.
• BP’s refining marker margin dropped 20% QoQ in Q4 to USD 13.1, marking its lowest level since early 2022. Additionally, upstream production is expected to fall sequentially.

• TotalEnergies is to report its Q4 earnings on 05/Feb, with its quarterly and annual revenue and EPS projected to fall on a YoY basis.
• As of 03/Feb, TotalEnergies’ implied volatility (IV) stands at 23.20%, with an IV rank of 63.17% and an IV percentile of 84%.
• TotalEnergies’ OI by strike for the 21/Feb expiry shows calls concentrated at strikes 57.5, 60, and 62.5, while puts dominate at 50, 52.5, and 55.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: West China Cement, Adani Ports, Vedanta Resources, Softbank Group, Tata Motors, UPL Limited
• In the US, the December personal spending came in above estimates at 0.7% m-o-m (0.5% e / 0.6% revised p), while personal income inched up to 0.4% m-o-m (0.4% e / 0.3% p).
• Separately, the PCE price index climbed to 2.6% y-o-y (2.6% e / 2.4% p) and 0.3% m-o-m (0.3% e / 0.1% p). That said, the core PCE price index (the Fed’s preferred measure of inflation) was largely stable at 2.8% y-o-y (2.8% e / 2.8% p) and 0.2% m-o-m (0.2% e / 0.1% p).

• SGX IO Futures closed at $105.75/ton on Jan 31, gaining $0.90/ton over the week, with a high of $106.85/ton and a low of $103.50/ton.
• A golden cross formation on Jan 17 signaled a bullish trend, while RSI at 64.97 suggests a possible overbought condition.
• Prices remained in triple digits due to U.S. tariff uncertainties, reduced steel mill capacity, Lunar New Year closures, and weather-related supply disruptions in Australia’s Pilbara region.

• New administration could provide new opportunities.
• With the new Trump 2.0 administration now in control of the US’ domestic and foreign policies, changes to how the federal government will address the energy transition trend and Chinese dominance of the related supply chains could have a profound impact on metal resource developers like TMC, which should be positive for the company and its stakeholders.
• From talking to doing. The Pentagon has yet to deliver its report (originally due March 2024) on the feasibility of processing polymetallic nodules in the US, required by the 2024 NDAA, having potentially slow-walked the project during the previous administration.

• Discounts to NAV of covered holdcos mainly tightened during January 2025. Discounts to NAV: C.F.Alba, 12.9% (vs. 11.8% as of 31 December 2024); GBL, 40% (vs. 40.9%);
• Heineken Holding, 13.2% (vs. 15.8%); Industrivärden C, 3.0% (vs. 5.5%); Investor B, 4.5% (vs. 7.6%); Porsche Automobile Holding, 36% (vs. 32.2%). Rio DLC spread tightened to 20.3% (vs. 23%).
• What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).