Beyond The Noise. The Energy Report 03/28/2025

Markets are fluctuating wildly, and the fear index is all over the place but if you look beyond the noise, President Trump’s policies on the economy are working. Perhaps the best evidence is the fact that the U.S. Gross Domestic Product was revised up to an annual rate of 2.4% in fourth quarter 2024, Real GDP was revised up 0.1 percentage point in the third estimate of U.S. economic growth measured by GDP much stronger than expected while the prices paid showed that inflation was moderating. Today we get the USC PCE Price index and if that comes in weaker than expected, it could start to signal that President Trump’s economic policies are reducing inflation. Perhaps one of the best things that is going to moderate inflation is DOGE.

In an amazing interview with Brett Baier on Special Report last night, Elon Musk and the DOGE team pointed out the ridiculous amount of waste and fraud that is apparent in the federal government and the markets are already sensing that the DOGE Team’s goal to cut the US deficit in half, to a trillion dollars, is not only achievable but may even actually end up saving more than that. If DOGE is successful in cutting the deficit in half that means that the inflationary pressures being created by the huge budget deficits are going to ease.

On the Brett Baier Special Report DOGE special last night, a member of the team and an engineer told Bret Baier that Social Security is an area of great concern. He said that the Social Security Administration gets phone calls every day from people trying to change direct deposit information on monthly deposits and that 40% of phone calls they get are from fraudsters. He also suggested that in the past some of them got away with it, that is stealing benefits from retired people. Now that I’m getting old I’m taking this personally. Leave us old people alone and get off our lawns.

DOGE also makes the federal government more efficient. We’re going to get more bang for our buck which will allow Congress to keep their spending under control and not put more burden on the taxpayers especially the poor and middle class. And while some complain that the poor and middle class aren’t paying the taxes and that we need to tax millionaires and billionaires more, the reality is that everybody’s being taxed enough but the problem is that the government has been wasteful with the spending. That wastefulness has caused rampant inflation that has hurt the poor and middle class the most.

While Wall Street may not be loving DOGE, Main Street sure is loving it. By putting the power back into the private sector and taking it away from the government, it will allow the economy to grow exponentially and the data that we’re seeing so far his suggesting that we are on that track.

The EPA administrator Lee Zeldin also revealed that the EPA under Biden funneled billions of dollars to Democrat NGOs which are nonprofit organizations that are supposed to operate independently of any government, in the name of climate change. Elon Musk told Brett Baier that nearly every activist federal judge obstructing the President’s agenda has a spouse or a child drawing a paycheck from a Democratic aligned NGO. Trump’s policies have directly undercut these NGOs creating a clear conflict of interest. No wonder they protest so loudly.

President Trump has pressured oil prices downward. Despite industry concerns about tariffs, deregulations are helping smaller producers, especially by removing the methane tax. However, keeping prices low remains challenging due to tight inventories that could easily cause a price spike. Gasoline crack spreads are rising as gasoline prices at the pump increase seasonally. For traders, buying calls is advisable since they are currently cheap due to market conditions. Although the timing of a price spike is uncertain, the likelihood of it happening soon is increasing, making the risk-to-reward ratio of out-of-the-money options very attractive.

The weather across the United States is affecting natural gas prices; however, they found support following yesterday’s report from the EIA. The EIA estimates that working gas storage was 1,744 Bcf as of March 21, 2025, which represents a net increase of 37 Bcf from the previous week. Stocks are 557 Bcf lower than last year and 122 Bcf below the five-year average of 1,866 Bcf. Total working gas at 1,744 Bcf remains within the five-year historical range.

And because we’re below the five year average any weather issues either extreme heat or unusual cold could keep the natural gas on an upward trajectory on top of that weather forecasters are suggesting that we could see another active hurricane season which could impact natural gas prices that is why you have to keep an eye on the weather so download the Fox Weather app.

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Open your account by calling Phil Flynn at 888-264-5665or email me at pflynn@pricegroup.com.

Thanks,