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Oil prices WTI have dipped below 60 as some Fed Officials are getting cold feet moving forward with additional interest rate cuts and the stock market is starting to look a bit shaky. The Wall Street Journal says that, “investors have also been unsettled by indications that the Federal Reserve might not cut interest rates again next month. On Monday, Governor Lisa Cook described the central bank’s December meeting as “live.” Two other officials, Mary Daly and Austan Goolsbee, said they had open minds as they weigh a slowing labor market against above-target inflation.

This comes as the Fox Weather ap is warning that we could get a much colder winter this year and already we’re seeing signs of that in the short-term forecast. Fox Weather is reporting that as “America heads deeper into autumn, thoughts start turning to even chillier temperatures and, for many northern cities, perhaps their first snow of the season. In addition, the presence of a La Niña will remain through November, according to the FOX Forecast Center.

These forecasts drove up the cost of natural gas yesterday as well as other heating fuels. Both diesel crack spreads and gasoline crack spreads are rising as refining margins are strong and try to balance the need for both fuels as demand in the us is exceptionally strong. Do you want to learn more about crack spreads? Then call Phil Flynn at 888-264-5665. The Energy Information Administration warns that cracks could widen if distillate demand increases this winter, though a potential crude surplus—despite OPEC+ cuts—may limit gains.

The OPEC pause may indicate that OPEC’s spare capacity is limited. It remains to be seen whether the market will shift its focus to the strong demand anticipated for diesel and natural gas this winter, especially if the season turns out colder than average. A situation not observed in over a decade.

And with the risk off mood and the stock market, oil is having a hard time getting a bid this morning and we get tonight the American Petroleum Institute report on supplies. One of the things that we’re going to focus on this week is the demand side of the equation continue to see demand coming in above expectations and we’re not seeing any real signs of an oil glut as supplies have fallen last week. Of course we saw a dramatic drop in inventories and the market must be expecting that we’ll see a rebound this week. If we don’t, it’s going to be harder to justify oil in the low 60s or even in the high 50s.

Energy demand for data centers is just getting started and the demand for supplies and electricity is going to be absolutely through the roof. Big data centers are being built all over the place and a major big plant in Chicago for Amazon is raising eyebrows. In the meantime, the Trump Administration is trying to use its influence to keep the power grid healthy and reverse some of the Biden administration’s push towards interruptible power sources.

According to The Wall Street Journal, the Trump administration mandated that the J.H. Campbell Complex—a coal-powered facility in Michigan—stay operational, countering scheduled shutdown plans. Maintaining operations at the Campbell plant has come at a cost of $80 million through September 30, which breaks down to about $615,000 daily. This action has ignited controversy: environmental advocates and some local residents support closing the plant, while others suggest repurposing the location to host a data center.

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