Refuse To Bend the Knee. The Energy Report 03/03/2025

Oil prices rise as peace is allusive. Instead of giving peace a chance, Volodymyr Zelensky, blew up the minerals deal and a path to ceasefire. He instead chose to continue the quagmire that is killing his people and destroying his country.  President Trump made his position clear and said that “I refuse to bend the knee to their next endless war in Ukraine. I want peace. They want money, and they want conflict. Even if it means walking us to the brink of World War 3.”

Sadly, this war is going to continue, also raising the risk premium on oil. Europe sadly will have to continue to fund this war and will still have to buy natural gas at sharply higher prices. Javier Blas and BLOOMBERG points out that, “Europe starts March with its natural gas storage at ~38.2% of capacity, making it very likely stocks would be at 30-35% by April. Whatever target the EU sets for Nov. 1, absent Russian pipeline gas — big question mark –, it’s going to require a hell of a refile.

Remember that President Trump was laughed at by the left and Europe when he warned about the dangers of Europe becoming dependent on Russia for supply. They are not laughing anymore and because of the short sightedness and their investment in the green new steal (as Kevin Gordan calls it ) it has cost their poor and middle-class money and added to their misery.

BP last week acknowledged their failures and their “beyond petroleum” push and have moved “back to petroleum” and that should signal an end to the big oil renewable push that has shown no profit and no headway on reducing climate concerns.

On top of that Donald Trump is going to make a big announcement tomorrow and talk about cryptocurrencies. It’s risk on the back of the market and that’s going to give oil some significant support. With the expectation of the stock market to move higher, the backdrop for oil is very strong. Seasonally speaking the end of March is traditionally very strong for all crude oil and products so take advantage of any weakness to put-on long-term positions.

The Energy Information Administration is reporting that  Natural gas continues to hold in there after getting beat up on the warmup.

The Energy Information Administration is reporting that Refinery closures and rising consumption will reduce U.S. petroleum inventories in 2026 In 2026, EIA forecasts that inventories of the three largest transportation fuels in the United States—motor gasoline, distillate fuel oil, and jet fuel—will fall to their lowest levels since  the year 2000.

EIA says that Two pending refinery closures will reduce U.S. production of refined petroleum products. When combined with our forecast of growing consumption, we expect inventories for the three fuels to decline through 2026. We forecast inventories for these fuels will end next year at 375 million barrels, the lowest since 2000 when they ended the year at 358 million barrels.

Inventory withdrawals tend to increase wholesale and retail fuel prices because market participants must meet demand by competing for a smaller pool of refinery production. As a result, we also forecast wholesale refinery margins for the three fuels will increase. In our forecast, however, these wider margins are partially offset by falling crude oil prices, leading to relatively smaller increases in retail fuel prices or even a decline in retail gasoline prices.

Reuters reported that – U.S. President Donald Trump on Wednesday said he was reversing a license given to Chevron (CVX.N), opens new tab to operate in Venezuela by his predecessor Joe Biden more than two years ago, accusing President Nicolas Maduro of not making progress on electoral reforms and migrant returns.  In a post on Truth Social, Trump said he was “reversing the concessions” of the “oil transaction agreement, dated November 26, 2022.”

Fox Weather is reporting that, “Tens of millions of people across the U.S. from the Plains to the Southeast are preparing for a potential multiday severe weather outbreak this week, with forecasters warning of threats of large hail, damaging wind gusts and even some strong tornadoes. Strong thunderstorms rolled across Oklahoma and Texas to end the weekend on Sunday, but the FOX Forecast Center said the more significant severe weather threat will begin late Monday and last through at least Wednesday.

Make sure you download the Fox Weather app to keep up with the latest on weather as it will impact the natural gas and other markets as we go forward. If you haven’t stayed tuned to the Fox Business Network you should!

It’s also time for you to open your futures trading account today by calling Phil Flynn at 888-264-5665 or by emailing me at pflynn@pricegroup.com.