By Timothy S. Snyder, Matador Economics

India’s Prime Minister Narendra Modi visited the U.S. over the last couple days and the news coverage was sparse at best. One would assume reciprocal tariffs stole the stage and the lack of any specific agreement on crude-oil imports to India led the way.

As the statement read, the two countries agreed to significant energy trade, making the U.S. “a leading supplier of oil and gas, hopefully the number one supplier.” This means talks will continue, and Modi went back to India with an agreement to continue talks, but without an agreement on specific amounts of oil and gas. There were discussions regarding nuclear energy as well.

The markets would have liked a specific agreement, but we may have gotten as much as we were going to get with a non-ally who has commitments to China and Russia too. Modi is back at the White House for trade talks today.

Other top stories:

Drill Down, Baby Drill Down: We are watching to see what develops as China starts an “Ultra-Deep” drilling campaign. Several Chinese companies are looking to drill as deep as 26,247 feet below ground.

Drop in gas inventories: Thursday’s Natural Gas Storage Report showed inventories continuing to fall as we trudge through the winter. In the Nov. 8, 2024 report total inventories for U.S. natural gas topped 3.974 billion cubic feet. Today, natural gas inventories have dropped to 2,297 billion cubic feet and there’s more winter ahead. This time last year, the inventory number was 2,545 billion cubic feet. Demand is higher and we’re working to convert more gas to LNG, for export. I expect to see higher U.S. production this year, to recover from this winter and prepare for the next.

Retail sales disappoint: The January Retail Sales Report came in with headline numbers a disappointing -.9% on expectations of -.1% month/month. It was a much bigger drop than economists expected and the biggest decline since last January. Devastating fires in Los Angeles may have also impacted spending. Sales plummeted 2.8% last month at auto dealers and slumped at furniture stores, home and garden centers.

U.S. winter weather: The average temperature in January was the lowest since 1988, according to Pantheon Macroeconomics, and was particularly disruptive in the South. A brief warm up over the next couple days will give way to another cold blast then a Polar Push heads deep into the Southern U.S. winter’s not over yet!

More energy commentary is available at www.matadoreconomics.com