To Enrich or not to Enrich. The Energy Report 06/03/2025

On Truth Social the President seemed to make it clear that “The AUTOPEN should have stopped Iran a long time ago from “enriching.” Under our potential Agreement — WE WILL NOT ALLOW ANY ENRICHMENT OF URANIUM!” Trump wrote on Truth Social.”

This came one day after the market rallied after the OPEC decision to raise production by the expected 411,000 barrels were greatly exaggerated. There were unsubstantiated claims that OPEC would discuss a larger production increase, reports of infighting, and speculation about Russia leaving or the UAE demanding a higher production cut. These were exaggerations not grounded in reality, which explains the market’s rebound after OPEC’s decision.

In the meantime, the spreads in the oil market appear more favorable, as refining margins worldwide are strong, indicating robust demand and a tighter market.

Product demand for petroleum looks solid. Reuters reported that refiners across the globe are reaping unexpected profits from producing key fuels in recent weeks, offering an ailing sector respite before an anticipated weakening later this year, as plant closures have tightened fuel supply needed to meet peak summer demand.

The strength in fuel markets contrasts with crude oil prices falling to a four-year low in May, after OPEC+ unwound output cuts faster than planned. It also suggests demand has so far proved resilient despite ongoing concerns about the impact of tariffs.

Yet it its a fact that we are in a battle to meet the demand for the economy of the future when it comes to artificial intelligence. The Trump Administration gets it that we’re in this battle as private companies are taking steps to meet demand.

According to a CNBC report,  Meta has signed a 20-year deal to buy nuclear power from Constellation Energy, aiming to meet the growing energy needs of its data centers. Starting June 2027, Meta will purchase approximately 1.1 gigawatts of energy from Constellation’s Clinton Clean Energy Center in Illinois, which is the site’s entire output. This agreement will support the plant’s operations and relicensing. Without Meta’s commitment, the plant faced closure when its zero-emission credit expired.

Of course, it’s going to be the biofuel issues which has driven down the price of soybean oil pretty dramatically as there’s concerns that the Trump Administration is not going to have as big a biofuel mandate. Successful Farmer reports that, “the Environmental Protection Agency (EPA) is expected to propose new RVOs, which regulate the use of biofuels. Farmers and agricultural leaders hope these mandates will increase significantly.”

“Farm groups and companies like ADM and Bunge are requesting no less than 5.25 billion gallons of biomass-based diesel for 2026 — 60% higher than 2025’s level. They also want the ethanol mandate to stay at 15 billion gallons,”Farms.comreported.

“Interestingly, the American Petroleum Institute is also supporting this push. However, some refiners oppose the plan, citing low gasoline sales and limited feedstock supply for biofuels,”Farms.comreported. “According to the EPA, the upcoming RVO proposal has already been submitted to the White House and will soon be open for public comment.”

Natural gas is back and forth with the weather. There was a nice upward bullish reversal yesterday on concerns of more demand and tight supplies. We are also seeing concerns about a potential tropical storm developing in the Gulf of Mexico. Fox Weather has reported that forecasters are monitoring the Southeast coast for potential tropical development this week. On Monday, the National Hurricane Center identified an area from Florida to North Carolina with a low 10% chance of development over the next week. I like the natural gas and recommend putting on option strategies going into the summer.

Download the Fox Weather Ap to keep up with the storm risk. Stay tuned to the Fox business Network! Invested in you!

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