Dems Take Control
Tuesday’s Georgia senatorial election run-off resulted in Raphael Warnock and Jon Ossoff defeating the two Republican candidates and tilting control of the Senate to the Democratic party, which will also be taking control of the House of Representatives and the White House in January. Democratic dominance of all three branches of government will give control over the energy and agriculture committees which could directly and immediately impact two of the largest components of the U.S. economy. This means ramifications for farmers, ranchers, miners, loggers, drillers, refiners, builders, truckers, and virtually every part of the economic chain that supports the producers who use their raw materials to make our food, clothing, housing, and fuels.
One change the Dems have signaled clearly is an emphasis on renewable or green energies instead of fossil fuels derived from coal and crude oil. While solar and wind energy will find more government support, ethanol and biodiesel should find welcome sponsorship from Midwestern growers. Anything that helps reduce the emission of greenhouse gases greenhouse gas emissions is likely to find support from the incoming administration. Renewable fuel standards (RFS) will undoubtably be examined more closely in the coming months.
Food subsidies could increase in the form of food stamps and school lunches in an effort to find markets for current surpluses of commodities such as milk and cheese. The Supplemental Nutrition Assistance Program (SNAP) might be one beneficiary.
Most analysts expect more spending on housing to aid infrastructure, increasing demand for construction materials, including lumber, steel, aluminum, and copper.
Crude Climbs as Saudi’s Cut Production
Supply and demand factors outside of the U.S., as well as droughts, the COVID-19 pandemic, and political decisions by foreign leaders, continue to impact prices dramatically. Midweek, Saudi Arabia promised to cut a million barrels of production per day, sending crude oil futures over $50.00 per barrel for the first time since prices fell into negative territory back in March. These are the highest prices since February. Saudi Arabia and Russia seemed deadlocked in a debate about production cuts, but the Saudis independently announced their commitment to cut so crude was sent flying over the $50.00 mark on Tuesday. By Friday, crude oil for February delivery hit $51.83 per barrel. Crude is the largest single commodity market traded world-wide in terms of dollar value and impacts nearly all other markets.