The Trump Corollary
- U.S. reasserts its policy of preeminence in the Western Hemisphere
- The brewing conflict with Venezuela likely to be first test
- Bringing more than 1 million bpd of production back to market likely to be challenging
- Natural gas futures technical analysis shows signs of fatigue for current bullish move
Sincerely,
David Thompson, CMT
Executive Vice President
Powerhouse
(202) 333-5380
The Matrix
Last week the Administration announced a new U.S. National Security Strategy. The document announced the ‘Trump Corollary’ to the Monroe Doctrine. This was further defined as a reassertion and reinvigoration of U.S. preeminence in the Western Hemisphere. The confrontation with the Maduro regime in Venezuela looms as the first
test of this new corollary that has significance to the energy markets.
Before attempting to assess the impact of a U.S. engineered a regime change on the price of oil, it is important to know the current state of play. In the early 2000’s, Venezuelan crude oil production was over 3 million barrels per day (bpd). Sanctions and subsequent mismanagement of the resource base reduced that amount to 2 million bpd in 2017 and only 900,000 bpd this year.
Consulting firm Wood Mackenzie weighed in recently with their assessments. Should changes occur that would allow the current sanctions regime to be lifted (and assuming physical infrastructure remains undamaged) Wood Mac believes modest investment in
operational improvements could push oil production back to near 2 million bpd. The likely time frame for this output gain is assessed to be within one to two years. More significant production increases would need much longer time frames and would likely require state-owned oil company PDVSA to develop partnerships with international oil companies.
Under the most optimal conditions, the market might expect to see 1 million bpd of Venezuelan oil return to the market in the short to medium-term time frame – but optimal is by no means a given.
Supply/Demand Balances
Supply/demand data in the United States for the week ended November 28, 2025, were released by the Energy Information Administration.
Total commercial stocks of petroleum increased (⬆) 5.2 million barrels to 1.2760 billion barrels during the week ended November 28th, 2025.
Commercial crude oil supplies in the United States were higher (⬆) by 0.6 million barrels from the previous report week to 427.5 million barrels.
Crude oil inventory changes by PAD District:
PADD 1: Up (⬆) 1.2 million barrels to 8.5 million barrels
PADD 2: Up (⬆) 0.1 million barrels to 101.0 million barrels
PADD 3: Down (⬇) 0.5 million barrels to 246.5 million barrels
PADD 4: Up (⬆) 0.4 million barrels to 25.0 million barrels
PADD 5: Down (⬇) 0.6 million barrels to 46.5 million barrels
Cushing, Oklahoma, inventories were down (⬇) 0.5 million barrels to 21.3 million barrels.
Domestic crude oil production increased (⬆) 1,000 barrels per day from the previous report to 13.815 million barrels per day.
Crude oil imports averaged 5.981 million barrels per day, a daily decrease (⬇) of 456,000 barrels. Exports increased (⬆) 15,000 barrels daily to 3.613 million barrels per day.
Refineries used 94.1 percent of capacity; an increase (⬆) of 1.8 percent from the previous report week.
Crude oil inputs to refineries increased (⬆) 433,000 barrels daily; there were 16.876 million barrels per day of crude oil run to facilities. Gross inputs, which include blending stocks, increased (⬆) 325,000 barrels daily to 17.088 million barrels daily.
Total petroleum product inventories increased (⬆) by 4.7 million barrels from the previous report week, down to 848.5 million barrels.
Total product demand decreased (⬇) 51,000 barrels daily to 20.189 million barrels per day.
Gasoline stocks increased (⬆) 4.5 million barrels from the previous report week; total stocks are 214.4 million barrels.
Demand for gasoline decreased (⬇) 400,000 barrels per day to 8.326 million barrels per day.
Distillate fuel oil stocks increased (⬆) 2.1 million barrels from the previous report week; distillate stocks are at 114.3 million barrels. EIA reported national distillate demand at 3.430 million barrels per day during the report week, an increase (⬆) of 56,000 barrels daily.
Propane stocks fell (⬇) by 0.7 million barrels to 103.5 million barrels. The report estimated current demand at 1,143,000 barrels per day, an decrease (⬇) of 379,000 barrels daily from the previous report week.
Natural Gas
The price advance in Henry Hub natural gas futures that started on November 28th has been on a noticeable uptick in open interest which indicates fresh money coming into the market and crossing the bid/ask spread, moving prices higher. The immediate concern for the bulls is that today’s sell-off came just as the RSI indicator for the January ’26 contract hit overbought levels. The Bollinger Bands, a measure of relative volatility, indicate that the most volatile part of the recent rally may have passed.
According to the EIA:
- Net withdrawals from storage totaled 12 Bcf for the week ended November 28, compared with the five-year (2020–24) average net withdrawals of 43 Bcf and last year’s net withdrawals of 26 Bcf during the same week. Working natural gas stocks totaled 3,923 Bcf, which is 191 Bcf (5%) more than the five-year average and 18 Bcf (less than 1%) lower than last year at this time.
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