Give Peace A Chance. The Energy Report 03/14/2025

Democratic war mongers continue to be dismayed at President Trump’s ceasefire initiatives between Russia and Ukraine. I guess they believe that the only good Russian is a dead one. The far left compares Vladimir Putin to Hitler but they also compare Trump to Hitler. So, for them it’s like Predator versus Alien. So the only answer they have is more funding for death and destruction and an endless quagmire because as you know it was Putin that invaded Ukraine.

While Mr, Putin is not a nice guy and I am sure he has a vision of Russia regaining its former Soviet territory and building a new Russia. The reality is that the West and Ukraine was not always on the up and up with Putin either. I guess we should all long for the simple days like when Hillary Clintion gave the Russian’s a big reset button because the mean Republicans did not think he was our friend. Or like when President Barack Obama told failed Republican Presidential Candidate Mitt Romney that the 1980’s called and want their foreign policy back.

Yet despite all the noise from the left, energy markets are starting to bet that President Trump gets his ceasefire. The big players are confident that President Trump will get his ceasefire and are already looking at cutting deals. Bloomberg reported Russian and European officials say the US is exploring ways to work with energy giant Gazprom PJSC on global projects, a step toward forging closer ties with the Kremlin while trying to broker a peace deal on Ukraine. European assessments suggest there have been preliminary contacts between US and Russian representatives on the issue, but it’s not clear who’s leading the conversations or whether the Trump administration is directly involved, according to people familiar with the matter. The White House declined to comment. Discussions between the US and Russia about possible collaboration with Gazprom are at an early stage, according to the people who asked not to be identified discussing private deliberations according to Bloomberg.

The biggest beneficiary of a potential ceasefire would be Europe. As a group they desperately need Russian energy and had they listened to President Trump years ago, it probably wouldn’t have been as acute of a situation but instead Europe decided to laugh. Europe’s not laughing anymore. Not only have they been called out by President Trump for their trade abuses, they’re now in a trade war and  really are going to need Russian energy. Until they can transition to more US energy, one of the ways that Europe could help their situation when it comes to the trade war is to drop their tariffs and increase their purchases of American liquefied natural gas as well as some of that beautiful light sweet shale oil.

The trade war caused significant disruption in energy markets yesterday leading to a sell-off. However, with market stabilization and oil showing positive movement, there is optimism. With summer approaching, refiners will need to ramp up production to replenish gasoline supplies quickly.

Despite the concerns of tariffs on China, we are seeing a lot of US energy continued to go to Asia. The Energy Information Administration reported that U.S. propane exports averaged a record 1.8 million barrels per day (b/d) in 2024, the most since we began collecting this data in 1973. U.S. propane exports increased for each of the last 17 years, with growth driven by higher demand in East Asia, mainly China, and a widening propane price differential between U.S. and global benchmarks. Propane is consumed globally in the residential and commercial sectors for uses such as space heating. It’s also used as a petrochemical feedstock to produce propylene and ethylene, key feedstocks in plastic production.”

Record U.S. propane production has supported the rise in propane exports. Propane production, which is a byproduct of natural gas processing and crude oil refining, has increased rapidly over the past 10 years as U.S. natural gas output has grown. Higher propane production has led to lower U.S. propane prices relative to Asia, underpinning the record export levels.

Infrastructure investments have also played a crucial role in accommodating growing shipments. Expansion projects at U.S. propane export terminals that started up in 2019 and in 2023 have allowed U.S. exports to increase by more than 700,000 b/d. U.S. propane exports surpassed 2 million b/d in November 2024 for the first time, as petrochemical and space heating demand in Asia increased.

Natural gas supply has been affected by weather. Make sure you download the Fox Weather app. Yesterday, we tested $400 and bounced, making $400 the support line. Looking ahead, supply may create a potential long-term bottom across the curve. The EIA reported that working gas in storage was 1,698 Bcf as of March 7, 2025, decreasing by 62 Bcf from the previous week. Stocks were 628 Bcf less than last year and 230 Bcf below the five-year average of 1,928 Bcf. At 1,698 Bcf, total working gas is within the five-year historical range.

The FOX Forecast Center said that multiple days of potent thunderstorms could bring destructive winds, large hail, and significant long-tracked tornado activity (EF-3 or higher). The main action on Friday will come in the form of a powerful squall line of storms which is expected to develop during the afternoon across Missouri and Iowa and charge east through the Mississippi Valley, the FOX Forecast Center said.

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