Just Plain Wrong. The Energy Report 03/13/2025

The IEA says that they see the growth in global oil demand at just over 1.0 mb/d this year reaching 103.9 mb/d. OPEC expects world oil demand to rise by 1.45 million bpd in 2025 and by 1.43 million bpd in 2026. Both forecasts were unchanged from last month. The Energy Information Administration puts global demand at approximately 104.7 million barrels per day (bpd) in 2025. So once again the International Energy Agency is lowballing the demand side of the equation.

In the past, they underestimated oil demand to promote green energy transition and reduce fossil fuel investments. This strategy failed, and increased government spending on green energy without returns has contributed to large deficits and global inflation.

The lion has roared, and the markets are listening. Contrary to widespread belief, the trade war is not automatically increasing consumer prices. While some industries will be severely impacted, others may benefit. The International Energy Agency even warned that the trade war could reduce oil demand, potentially leading to lower prices.

Although tariffs are causing concern on Wall Street, early indicators show that Main Street is experiencing benefits such as lower interest rates and reduced inflation. Prior to the implementation of tariffs, there were already indications that government efficiency initiatives and policies under the Trump Administration were contributing to lower inflation and reduced regulations. Although the full impact of the tariffs has yet to be observed, it is believed that they will not significantly increase overall inflation. Certain products might increase in price, while others could decrease, leading to a minimal impact on overall inflation rates.

Yesterday, the Consumer Price Index (CPI) was reported to be lower than expected, which increases the likelihood that the Federal Reserve may cut interest rates. The CPI rose 0.2% last month, the smallest gain since October, after accelerating 0.5% in January, beating market expectations.

Reuters indicated that higher shelter costs were partially offset by cheaper airfares. While property and rent prices remain high, the drop-in interest rates could stimulate building activity. Although lumber prices are increasing due to potential tariffs on Canada, regulations related to building and energy may keep downward pressure on those prices.

President trump said he’s very happy that gasoline prices are down. He noted that oil prices, gasoline prices, inflation, and interest rates are all decreasing. These factors appear to be contributing to economic growth, despite some fluctuations in the stock market. Main Street is reportedly experiencing benefits from these policies. Reductions in government spending are helping to lower inflation and signaling to the market that inflation may have peaked, leading to expectations that grocery prices and gasoline prices will continue to decrease.

GasBuddy reports that March gasoline prices were the lowest since March 2021. Diesel prices also fell to a three-month low and are down 14% from the pre-inauguration high of $2.55. Chris Robinson attributes these decreases to Elon Musk’s efforts and reduced government spending.

Yesterday in the Energy Information Administration report U.S. oil production plateaued slightly and despite the projections that we will see record oil production in the United States this year, some in the industry are warning of a slow down.

Lee Zeldin announced a new Trump Energy Initiative! “Today, I am pleased to announce the largest deregulatory initiative in U.S. history. The Environmental Protection Agency (EPA) is initiating 31 significant actions to fulfill President Trump’s commitment to energize American energy, reinvigorate our automotive industry, uphold the rule of law, and empower state authority.” “The EPA will be reassessing numerous restrictive regulations that impact nearly every sector of our economy and burden Americans with trillions of dollars in costs.” “Our initiatives include reconsideration of the Biden administration’s revised Clean Power Plan, mercury and air toxic standards, QUAD O BC, particulate matter 2.5 standards, as well as regulations for light, medium, and heavy vehicles. Additionally, we will review rules affecting knee shops and the so-called social cost of carbon. To foster cooperative federalism, the EPA will collaborate with states that were previously disregarded by the former administration’s Good Neighbor Rule.”

“Furthermore, today’s significant reforms also encompass the 2009 endangerment finding and all subsequent measures derived from it. The endangerment finding has been described as pivotal within the climate change discourse.” “For me, strict adherence to the U.S. Constitution and national laws is paramount, without exception. Today marks the end of what I consider imprudent environmental policies as the EPA takes decisive steps to usher in a period of American prosperity.” “Our actions are designed to reduce the cost of living by making it more affordable to purchase vehicles, heat homes, and run businesses. This will generate job growth, particularly within the U.S. automotive sector, thereby strengthening our nation. From the campaign trail to implementation. President Trump has consistently delivered on his promise to promote energy independence and lower living costs. The EPA is committed to contributing to this resurgence of American success.”

The Energy Information Administration report provided weekly data. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.4 million barrels from the previous week. At 435.2 million barrels, U.S. crude oil inventories are approximately 5% below the five-year average for this time of year. Total motor gasoline inventories decreased by 5.7 million barrels from last week and are 1% above the five-year average for this time of year. Finished gasoline inventories and blending components inventories both decreased last week. Distillate fuel inventories decreased by 1.6 million barrels last week and are about 5% below the five-year average for this time of year.

Total demand based on products supplied over the last four-week period averaged 20.7 million barrels a day, an increase of 3.9% compared to the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.7 million barrels a day, up by 0.1% from the same period last year. Distillate fuel product supplied averaged 4.1 million barrels a day over the past four weeks, up by 9.5% from the same period last year. Jet fuel product supplied was up 1.5% compared with the same four-week period last year.

European supplies are also constrained. The oil inventories of 16 nations decreased by 2.29 million barrels month-over-month to 975.84 million barrels in February. Crude oil inventories fell by 5.21 million barrels to 389.73 million barrels, gasoline inventories rose by 1.23 million barrels to 110.44 million barrels, middle distillate inventories increased by 2.74 million barrels to 396.34 million barrels, fuel oil inventories decreased by 0.03 million barrels to 56.32 million barrels, and naphtha inventories declined by 1.02 million barrels to 27.01 million barrels.

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