Trump pick for energy czar cd upend fuel prices 

Peter McGuire, CEO, XM Australia, says in the short term, if one is going for tactical trade over the next couple of months, then one has to be conscious of whipsawing and where the market is trending and whether we are going to see a re-return of that rally that we experienced a couple of months back. If it is not going to happen, then one has to consider that if those tariffs come into play, then what impact is that going to have on the likes of China. It is going to add considerable headwind to their export market.

Are the aluminium prices that we are seeing just a reaction to what China announced or is that a fundamental impact that is going to be a bit more sustainable as well?
Peter McGuire: A couple of things; first off, the whole complex has taken a little bit of a washout over the last week or two. Aluminium is down, as are zinc, tin, and certainly copper. I feel as though it is going to be interesting where that runs over the rest of the week and the rest of the month. We have got to take into consideration the big rally in the US dollar index. But yes, some of that LME prices have been very choppy and quite volatile. So, that is the nature of the base metal and the industrial metal market and it never ceases to surprise.

Do you expect further strengths to continue in all of these because there are a lot of moving factors. The dollar has shown considerable strength, but this entire US-China tussle is expected to aggravate from here on. What is the best way forward as a tactical trade then?
Peter McGuire: First off, one needs to consider policy changes with President Trump and that is a few months away yet. In the short term, if you are going to trade over the next couple of months, then you have to be really conscious of whipsawing and where the market is trending and whether you are going to see a re-return of that rally that we experienced a couple of months back.

But if it is not going to happen, then you have got to think that if those tariffs come into play, then what impact is that going to have on the likes of China. I would think it is going to add considerable headwind to their export market and naturally, how does China play into that and if it either absorbs the tariffs or changes its own internal strategy. So, it is a wait-and-see approach. President Trump is unconventional and we have got to see how unconventional he plans to be.

For the last couple of months, Brent crude averaged around or below the $75 per barrel mark. With no major trigger now, at least for the next three-odd months, do you expect crude prices to remain on the lower side or is there some trigger that could take the oil prices higher?
Peter McGuire: A couple of things. You have got to be appreciative that the war premium certainly is all but worn out and it has evaporated from the market. It has been a structural weakness over the last couple of months and just a downdraft and really very heavily sold off from those highs that we saw going back six or eight months ago.

The next part o it is the weather. If you were to see something impacting production, then that would be something to consider. The other side, of course, is that if you do not see any geopolitical concerns, then probably you are going to see the high 60s, even as low as $65 for Brent, that is what a lot of analysts are talking about and that could materialise.

So, we are just in a wait-and-see mode, but it has been a downdraft and it has been a great market to short over the last couple of weeks.

For 2025, what is the range you are expecting Brent crude to be?
Peter McGuire: I feel that if you de-structure the market in the sense of geopolitics, President Trump coming in could throw a large hand grenade into the energy complex. Realistically, we can expect cheaper prices. He wants to increase production. He wants to look at the US’ energy consumption. So, the US has got a very dynamic head of energy Chris Wright coming on board. He is a climate sceptic and former fossil fuel executive. It is going to be a policy of ‘drill baby drill’ and quite easily, there could be significantly lower prices from here. So, it is going to be a win for consumption and for consumers, maybe even $60 for Brent.

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