EMD059 - Macro Context: The Decoupling

Welcome to Energy Markets Daily, brought to you by DailyDominanceNow.com. Wednesday, November 19, 2025 — Macro Context. Today, we examine the global economic forces driving energy markets. The correlation between global growth and energy prices is breaking. **The Macro Landscape** The OECD cut its global growth forecast for 2026 to 2.7%. The engine is sputtering. China's property crisis continues. Industrial output is slowing. The transition from infrastructure to consumption is bearish for diesel and crude. Europe is flirting with recession. Manufacturing PMIs in Germany remain in contraction. High energy costs are de-industrializing the continent. The US is the exception. GDP growth remains at 2.1%, driven by services and tech. But manufacturing is flat. **The Dollar Headwind** The US Dollar Index is trading at 105.40. A strong dollar is a headwind for commodities. The Fed is holding rates higher for longer. With inflation above 2.5%, there's no rush to cut. This keeps the dollar bid and puts a ceiling on crude prices. **The Geopolitical Risk Premium** We have war in Eastern Europe and tensions in the Middle East. Yet the geopolitical risk premium in oil has evaporated. Why? Spare capacity. OPEC+ is sitting on over 5 million barrels of spare capacity. The market knows the taps can open if needed. The fear trade is dead. The market is trading on demand fundamentals, and those are weak. **Natural Gas - The Outlier** While oil is tethered to GDP, natural gas is decoupling. Data center power demand is the new driver. US electricity demand is projected to grow 4.7% over the next five years, driven by AI. Natural gas is becoming a technology infrastructure asset, not just a commodity. This explains why Henry Hub holds $3.60 while WTI collapses to $60. **Catalyst Watch** Thursday: EIA Inventory Reports. Friday: US PCE Inflation data. Next month: December OPEC+ meeting. **Final Word** The macro signal is clear: Global growth is too slow to support $80 oil without a supply disruption. But electrification is strong enough to support $4.00 gas regardless of GDP. Trade the decoupling. For inquiries: [email protected]. Subject: Energy Capital. This is Energy Markets Daily. We'll see you Thursday for the Inventory Report.