MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for January 8th:

Updated at 5:00 PM ET 

HEADLINES:

— IATA: Nov. Air Cargo Demand Up 5.5%; U.S. Drops 1.6%

— IATA: Nov Passenger Demand Up 5.7%; U.S. Alone Declines

— Valero to Idle Benicia Refinery by End of April 2026

— Analysis: Venezuela Oil Boon to U.S., Bane to Glut

— EIA reports 119 Bcf Withdrawal From US NatGas Storage

— Shell Eyes Higher Q4 Upstream; Refining Margins Rise

NEWS:

IATA: Nov. Air Cargo Demand Up 5.5%; U.S. Drops 1.6%

Global air cargo demand rose 5.5% year-on-year in November, with the North American market witnessing a 1.6% decline instead, the International Air Traffic Association (IATA) reported Thursday (1/8).

Carrier capacity in North America also decreased by 2.3% year-on-year in November, IATA stated.

Notwithstanding those declines, a couple cargo routes linked to North America grew last month, as did the air freight volume for many overlapping markets.

The North America-Europe air cargo route, for instance, expanded by 5% while the Asia-North America air freight sector grew by 1.8%.

IATA also noted that global jet fuel prices rose 5.9% in November despite falling crude prices, driven by refinery disruptions, European Union restrictions on Russian-derived products, and limited spare refining capacity.

Those factors pushed crack spreads for jet fuel close to double of last year’s levels, the international air traffic association added.

IATA: Nov Passenger Demand Up 5.7%; U.S. Alone Declines

Global air passenger demand rose 5.7% year-on-year in November, with North America seeing the smallest growth and the U.S. being the only domestic market to shrink, the International Air Traffic Association (IATA) reported Thursday (1/8).

The 4% year-on-year growth in North American air passenger volumes last month trailed all regions from Africa to Asia Pacific, Europe, Latin America-Caribbean and the Middle East, IATA data showed. The top three regions were Africa, which witnessed an 11.2% expansion followed by the Middle East at 9.6% and Asia Pacific at 9.3%.

In the domestic passenger market, the U.S. experienced a 1.8% slide in volumes as Brazil led with a 8.3% growth, followed by India with 7.7%  and China with 6.3%.

“Domestic U.S. traffic was the only major market to see a fall in demand, perhaps due to the government shutdown,” IATA Director General Willie Walsh said in a statement, highlighting the data.

The U.S. federal government was shutdown between October and mid-November due to funding issues.

Global passenger load factors also hit a record high of 83.7% year-on-year in November as carriers accommodated growing passenger demand despite constraints in airplane supply, IATA said.

Valero to Idle Benicia Refinery by End of April 2026

Valero Energy Corporation said in a statement Tuesday (1/6) that it has notified the California Energy Commission of its current intent to idle its 170,000 bpd Benicia Refinery by the end of April 2026, as the company continues to evaluate strategic alternatives for its California assets.

Valero said its subsidiary, Valero Refining Company California, submitted the notice as part of a broader review of operations in the state. The statement noted that the company is continuing with plans to safely proceed with idling refining operations at the Benicia refinery through a phased approach, beginning with processing units in February due to mandatory state inspections that cannot be deferred. Valero said the refinery will continue producing gasoline as it works down inventories, though most refining process units are expected to be properly idled by April.

The company did not provide additional details on potential workforce impacts but confirmed it expects to submit a Worker Adjustment and Retraining Notification (WARN) notice as required by law. Valero said it is offering Benicia employees the opportunity to transfer to another Valero location or receive outplacement service assistance during the transition.

“We understand the impact that this may have on our employees, business partners, and community, and will continue to work with them through this period,” Chairman, CEO and President Lane Riggs said.

California Governor Gavin Newsom said the updated plan marks a constructive shift from an earlier announcement that included the possibility of a full closure and exit from the Northern California market in early 2026. Under the revised approach, the Benicia refinery will continue producing gasoline through April 2026. After that, Valero plans to supply Northern California through a combination of existing inventories and imports.

Newsom said the state remains in discussions with Valero to evaluate options for continued operations at the Benicia refinery, adding that planning for imports would help support supply stability and limit price disruptions as talks continue.

Valero said it will continue to assess strategic alternatives for its remaining California operations.

Analysis: Venezuela Oil Boon to U.S., Bane to Glut

The ouster of Venezuelan President Nicolas Maduro is creating a multi-faceted outcome for energy markets, with U.S. refiners looking poised to benefit from cheaper, assured crude supply from a country now under their government’s oversight – even if the global oil glut grows.

Good News for U.S. Refiners

The U.S. capture of Maduro and its intent to immediately take control of 30 million to 50 million bbl of Venezuelan oil could be a boon to refiners in the U.S. Gulf Coast, whose plants were specifically designed for the South American country’s Merey crude.

In the 2000s, half of Venezuelan oil exports went to the U.S. After flows ebbed from 2015 onwards, refiners switched to more expensive grades of heavy, sour crude oil, sourcing alternatives from, among others, Mexico, Colombia, Saudi Arabia, and Canada.

Aging oil fields in Colombia, Ecuador and Mexico have translated into declining production in recent years. Mexican state refiner Pemex’s plans to produce more fuel domestically to reduce the country’s reliance on imports from the U.S. have the potential to further limit the supply of heavy sour crude oil, should often delayed and problem-riddled refining projects like Dos Bocas get off the ground.

While new pipeline infrastructure allowed Gulf Coast refiners easier access to Canadian crude oil, West Coast refiners had to until recently rely on more expensive imports to supplement their Alaskan-crude-heavy diet.

Aside from Gulf Coast refiners, those in the Midwest would also indirectly benefit from revived flows of Merey crude, given the prospect of steeper discounts for Canadian crude which will be competing with the higher imports from Venezuela.

Mixed Prospects for Supply

U.S. President Donald Trump has spoken of massive reinvestments into Venezuela’s decrepit infrastructure to revive oil production. The prospect of faster growing crude oil production in an already saturated market has added to oversupply woes.

The bearish sentiment, however, has been limited by the reality on the ground in Venezuela. A revival of crude production will require years of work and billions of dollars in investment, along with political stability and security for oil workers. So far, most oil majors have remained reluctant to signal interest in such an endeavor. Tapping into Venezuela’s vast crude oil reserves – at more than 300 billion bbl the largest in the world – won’t go without a hitch.

Venezuela, a founding member of the Organization of the Petroleum Exporting Countries, in its heyday in the late 1990s produced 3.45 million bpd of mostly heavy, sulfur rich crude oil.  Output was stable around 2.35 million bpd in the years preceding the U.S. shale boom.

But the oil price crash of the mid 2010s and consequent lack of revenues and reinvestment, along with mismanagement and the diversion of funds, led Venezuelan crude production to plummet below 1 million bpd by 2019.

Production has gradually increased since troughing at 280,000 bpd during the height of the pandemic-induced demand crash in mid-2020. In 2025, production averaged 937,000 bpd, according to Platts’ OPEC production survey.

The end of the U.S. oil tanker embargo will likely mean a return of recently shut production. At the same time, a new, cheaper and closer source of diluents in the U.S. Gulf Coast, necessary to pipe sludgy Venezuelan crude oil, can provide another small boost.

Experts, however, remain skeptical about production returning anywhere close to pre-2015 levels in the next few years, given the desolate state of the country’s oil infrastructure.

Outlook

A rapid growth in crude supply would pressure prices to a level low enough to stymie production in regions with higher break-evens, but overall still contribute to the global crude oil overhang, which the International Energy Agency forecasts to be around 3.8 million bpd in 2026.

The past year saw a growing divergence between crude oil and petroleum fuel prices. Even before OPEC in April decided to gradually return curtailed production, supply additions from outside the group were set to outpace demand growth.

Refining capacity in the U.S. and Europe is set to continue to shrink, and capacity additions elsewhere are far slower than expected crude oil supply growth. The return of Venezuelan crude oil is likely to add to this trend, which in the third quarter of 2025 led to the highest refining margins in years.

EIA reports 119 Bcf Withdrawal From US NatGas Storage

Energy Information Administration data released midmorning Thursday (1/8) show a 119 billion cubic feet withdrawal from U.S. natural gas storage to 3.256 trillion cubic feet in the week ended January 02.

Natural gas in U.S. storage is 3.6% lower than last year and 1% above the five-year average of 3.225 Tcf.

Regionally, EIA reports the East registered a 39 Bcf withdrawal to 697 Bcf, 5.6% less than a year ago and 6.4% lower than the five-year average.

Natural gas in storage in the Midwest decreased 44 Bcf week-on-week to 821 Bcf, a 7.3% deficit compared to the same week a year ago and 7.9% lower than the five-year average.

Mountain region natural gas in storage decreased 8 Bcf, unchanged year-on-year and 28% above the five-year average.

South Central storage fell 25 Bcf to 1178 Bcf, 2.3% less than in the same week last year and 3% above the five-year average.

Shell Eyes Higher Q4 Upstream; Refining Margins Rise

Shell expects its fourth quarter upstream production to have ranged between 1.84 million and 1.94 million barrels of oil equivalent per day, up from 1.83 million boepd in the third quarter, the Anglo Dutch energy major said in an outlook issued Thursday (1/8).

Adjusted earnings for the upstream segment are projected at between $2.3 billion and $3.1 billion, benefiting from higher production levels and lower overall operating expenses during the period, Shell added.

Refinery utilization for the fourth quarter is seen ranging from 93% to 97%, down from 96% in the third quarter, while indicative refining margin rose from $12 bbl to $14 bbl. Integrated gas production, meanwhile, is estimated at 930,000 to 970,000 boepd from 934,000 in the third quarter, Shell said.