Written Commentary
ADM Reports Q4 and Full-year 2025 Results
February 3, 2026
Very busy day for statistics including overnight blockbuster China Trade, Japan & Korea GDP, UK BRC Retail Sales, German Trade and US NFIB survey & Existing Home Sales, but unlikely to distract from Middle East; US EIA STEO and USDA WASDE also in view.
- Oil’s $50 roller coaster ride testament to gnawing ambiguity of political rhetoric, some relief from agreement to release SPR stocks, but primary supply chain disruptions in products and gas, not crude
- Recording of today’s Gulf Intelligence “Daily Energy Podcast”
EVENTS PREVIEW
The day is neither light on data (China Trade, Korea and Japan Q4 GDP, Japan Household Spending, UK BRC Retail Sales, German and French Trade, Swedish monthly GDP, and US NFIB Small Business Optimism & Existing Home Sales) or on major monthly reports in the energy (EIA STEO) and agricultural (USDA WASDE, China CASDE) sectors, and perhaps more poignantly corporate earnings from Saudi Aramco. But with the war in the Middle East raging, and more and more countries drawn in to the conflict, the flotsam and jetsam of regular macro news will have nothing than a blink of an eye in the spotlight. One financial markets aspect that has not gotten that much in the way of an airing is new credit issuance, outside of higher underlying government bond yields and obviously higher risk premia (i.e. wider spreads), but the longer that primary issuance markets remain largely shuttered, the higher the risk that A N Other company runs into a problem refinancing its debt, not because it’s a de facto ‘risky’ issuer, but rather encounters a ‘wrong place, wrong time’ problem (e.g. Northern Rock during the GFC). That said, there was some irony that two of yesterday’s issuers were China Oilfield Services and LG Energy Solution. But the broader point remains that the Middle East conflict has sharpened markets’ focus on risks such as private credit defaults, AI disruption to businesses, which a good many had been largely brushing aside before the conflict.
Yesterday’s $50 round trip on oil prices and equally volatile price action in products and natural gas underlines the scale of the challenge to policy makers from this devastating conflict, and also to traders having to sift through the incessant ambiguity of statements from politicians. The fact that G7 finance ministers only agreed that they could release SPR crude oil stocks if needed, rather than taking action now, may reflect disagreements among the group, in no small part exacerbated by the trade tensions of the past year. Europe for one, will not welcome the US decision to allow India to import Russian oil (at uncapped prices), particularly given the fact that the latest round of US and EU sanctions did appear to be impacting Russia’s offensive in Ukraine, given that Russia lost ground overall in February. It also reflects the fact that crude oil supply is not really an immediate problem (as can be seen in the global stock levels outlined by the IEA yesterday), but rather petroleum products and natural gas, and an SPR release will have no impact on that. A further dynamic is also worth monitoring, namely that a total of eleven countries, including the US and GCC members are now actively consulting with Ukraine on strengthening defences against drones thanks to its now extensive battlefield experience and resulting innovations in much cheaper but very effective defence technologies. Ukraine will hope that this changes some of the dynamics in its relations with and long-term support from the US, as well as the stalled ‘peace’ (for want of a better word) negotiations with Russia.
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