AI Powered Prosperity. The Energy Report 07/24/2025

Oil prices are back on the rise as optimism about the global economy as the Trump Administration takes action to win the artificial intelligence race and may be close to getting to secure favorable trade deals with the European Union and with China. The EU and US are reportedly nearing a trade deal that may set a 15% US tariff on EU goods, with possible exemptions, according to two European diplomats. While the White House says that discussion about any possible deals should be considered speculation. That of course is what I do.

The artificial intelligence race is a defining challenge with significant implications for our economy, national future, and humanity as a whole. The Trump Administration unveiled Wednesday a framework for its artificial intelligence (AI) policy, placing a heavy emphasis on boosting U.S. innovation, building out data center infrastructure and promoting American technology abroad. The 28-page AI Action Plan lays out the administration’s approach to the rapidly developing technology, putting forward more than 90 policy actions for “near-term execution” by the federal government. This, of course, will have benefits for commodity traders and commodities demand.

News of the deal offered some late support to oil prices in a market adjusting to unexpected rises in distillate inventories and a surprise drop in crude oil stocks. Let’s break down some of the latest numbers together. According to the EIA, U.S. commercial crude oil inventories dropped by 3.2 million barrels last week, bringing the total down to 419 million barrels—which is about 9% below where we’d expect them for this time of year. Gasoline stockpiles also slipped by 1.7 million barrels, though they’re still just a touch above the five-year average.

Now, distillate fuel inventories went up by 2.9 million barrels, but they’re running about 19% lower than the five-year norm. Over the past four weeks, total product demand averaged 20.6 million barrels per day, just edging out last year’s figures. John Kemp said that, “distillate inventories surged higher for the second week running in response to sharply higher crack spreads for diesel. Stocks climbed by a total of more than 7 million barrels over the two weeks ending on July 18. It was the largest increase for the time of year since at least 1990 and compared with an average accumulation of less than 2 million barrels over the last ten years. Inventories were still 28 million barrels (-20% or -1.49 standard deviations) below the ten-year seasonal average but the deficit had narrowed from 33 million barrels (-24% or -1.75σ) two weeks earlier”

Looking at specifics: gasoline demand came in at 8.8 million barrels a day, which is down 4.9% compared to last year’s. Distillate demand averaged 3.6 million barrels a day, just a bit lower by 1%. On the bright side, jet fuel demand is up 1.5% from this time last year.

All in all, it’s a mixed bag, but these stats  should give us some solid insights into where the market is headed. At least for today, that is higher. Going to keep this rally going we have to keep an eye on the news today. Any talk of a trade deal could well have that contract to test $70 a barrel very quickly.

Diesel inventory worries have eased for now, especially as the crack spread cooled off after some much-needed supply showed up. Still, overall stocks remain pretty tight—and that situation could turn on a dime, so it’s worth keeping a close watch as things develop.

Natural gas prices aren’t seeing much of a lift lately, thanks to strong production numbers and shifting weather forecasts for August. With supply concerns fading, the market seems confident that we’ll have plenty in storage heading into winter—especially if August brings some cooler weather and summer makes an early exit. Yet some forecasts are saying that it won’t be that cool for that long and that’s where the market is seeing the debate.

That’s why it’s smart to keep an eye on future weather patterns—and, of course, downloading the Fox Weather app can help you stay ahead of any changes. Today the market’s going to try to bottom it looks like we’re getting a little bit of support so we might get a short covering rally ahead of today’s inventory report. At 9:30a central time the EIA is going to release their data on storage, and it could be a major report to try to determine whether the market is at a bottom or it has more to go to the downside.

Naureen S. Malik at Bloomberg Reports that, “ArcLight Capital Partners acquired electricity developer Advanced Power with a plan to build 20 gigawatts of natural gas-fired plants in the US mainly to feed power-hungry data centers. It says it may invest about $5 billion over the next 5 years. ArcLight said the plants —  capable of producing enough energy to power 16 million homes — can be brought online in 2 to 7 years. The company also intends to build solar and batteries, and will focus on grids stretching from the mid-Atlantic to the Midwest, Texas and the desert Southwest.

Developers are racing to build plants that can provide round-the-clock power to data centers. There’s also demand for existing plants. Publicly traded power producers NRG Energy Inc., Vistra Corp., Constellation Energy Corp. and Talen Energy Corp. have together spent more than $34 billion this year snapping up mainly existing gas plants as the cost to procure power hits records.

Stay tuned and don’t miss a beat—download the Fox Weather app now for all the latest updates on these fast-moving stories! Plus, you’ll want to catch every minute on Fox Business Network, where we’re all about keeping you in the loop and ahead of the curve.

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