Way Up North (north to Alaska). The Energy Report 08/14/2025

 Way up north (north to Alaska) North to Alaska, we go north, the rush is on. North to Alaska, we go north, the rush is on. Global oil markets are on hold as President Trump goes north to Alaska to try to secure a cease fire while he is dialing up the pressure on Russia. Trump is s warning Moscow that, “very severe consequences” are on the table if Vladimir Putin doesn’t play ball and agree to a ceasefire later this week.

The petroleum markets crackles with anticipation as President Trump, fresh from candid exchanges with top European leaders, prepares for a pivotal encounter with the Russian president. The stakes are nothing short of monumental: if these talks collapse, the world could see the most severe sanctions on Russia to date, including secondary restrictions that would ensnare any buyers of Russian oil.

Eyes around the globe are locked on this unfolding drama—none more so than China and India. For India, the prospect of losing Russian barrels darkens the horizon, fueling concern over dwindling alternatives and heightening the tension sweeping through global energy markets. Trump’s looking to parlay Friday’s faceoff into a lightning-fast follow-up with Ukrainian leader Volodymyr Zelenskiy, after allies urged him to push for peace talks. Meanwhile, UK Prime Minister Keir Starmer is rolling out the red carpet for Zelenskiy in London on Thursday. The chessboard is set, the players are moving, and the world and the oil markets are watching every step.

After reports from the International Energy Agency that seemed to be very downbeat on the global demand, U.S. refiners are cranking up the volume. The EIA says that crude oil refinery inputs hitting a booming 17.2 million barrels per day for the week ending August 8. That’s 56,000 barrels per day from the week before, pushing operating rates to a sizzling 96.4% of capacity. Gasoline and distillate fuel output? Also on the upswing, clocking in at 9.8 million and 5.1 million barrels per day, respectively.

Imports are surging, too. U.S. crude imports averaged 6.9 million barrels a day—an eye-popping jump of 958,000 barrels over the previous week. But don’t let that fool you; the four-week average sits at about 6.2 million barrels a day, still 5.1% lower than last year’s same stretch. Gasoline imports averaged 632,000 barrels per day, and distillate fuel imports came in at 107,000 barrels per day.

On the inventory front, commercial crude stocks rose by 3 million barrels, landing at 426.7 million. That’s roughly 6% below the five-year seasonal average—bullish for prices. Motor gasoline inventories slipped by 0.8 million barrels and are right at the five-year average. Finished gasoline is up, blending components are down—classic summer driving season dynamics. With the drop in gasoline inventories and reports of Shell shut down a gasoline producing unit at its Norco Louisiana refinery a month early due to a leak helped the crack spread get cracking.

Distillate inventories increased by 0.7 million barrels but remain 15% under the five-year norm, pointing to underlying supply tightness. Propane/propylene? Up by 3.9 million barrels, now 11% above the five-year mark. Total commercial petroleum inventories climbed a solid 7.5 million barrels week-over-week.

Demand remains robust. Over the last four weeks, total products supplied averaged 21.2 million barrels per day, up 2.9% from last year. But gasoline demand is off 1.5%, and distillate demand is down 1.6%. The jet fuel story shines, up 4.3% compared to the same four weeks last year.

So the negativity on global demand and the possibility of a supply correction are very questionable especially if you look at these demand numbers but it’s very clear that while we debate the health of the global economy and global production, the market will move dramatically based on the outcome of the talks between the United states Russia and through the back door Ukraine. If we fail to see signs of a ceasefire oil could rally as much as $10.00 a barrel from these levels. If we do get a ceasefire we will celebrate with the plunge into the mid-50s. That plunge into the mid-50s of course would cause a drop in US energy production and the Energy Information’s Administration’s hope that US producers can squeeze more oil out of a single well may be severely challenged at that point .

Natural gas is still languishing as the Atlantic is heating up. FOX Weather reports that the hurricane season in the Atlantic basin runs from June 1 to November 30. But during an average August, four tropical cyclones are named, and two systems become hurricanes with sustained winds of at least 74 mph. Fox Weather also say that, “Tropical Storm Erin could undergo rapid intensification with Hurricane Hunters set to investigate Thursday. Fox Weather says that, “After fighting cooler ocean waters and Saharan dust, Tropical Storm Erin is now starting to become better organized and could rapidly intensify as Hurricane Hunters get set to fly into the strengthening storm on Thursday.

While tropical storm Erin is still way out of the Atlantic and the early models suggest that it won’t hit the gulf of America, the market should still be on guard for storm development. The National Hurricane Center shows an active storm along the Bay of Campeche near Mexico. The National Hurricane Center says a broad area of low pressure near the West Coast of the Yucatán peninsula is producing disorganized showers and thunderstorms. At this point the possibility of this disturbance becoming a tropical storm in the next 48 hours is at 20% and the same as being the same for the seven-day outlook.

Download the Fox Weather Ap to keep up on the storms, also stay tuned to the Fox Business Network! Invested in you!

Call to sign up for the Phil Flynn Daily Trade Levels and to open your account by calling 888-935-6487 or email pflynn@pricegroup.com.