Strike Pause Drop. The Energy Report 03/19/2025

Oil prices dropped as President Trump in a phone call to Russian President Vladimir Putin got Putin to agree to an immediate pause in strikes against energy infrastructure. While they fell short of a complete ceasefire in the Russian Ukraine quagmire, it did reduce the risk premium on oil as energy infrastructure was a target for both sides of this conflict. In fact, underneath the whole Russia Ukraine conflict the underlying theme has been energy dominance from the beginning, from access to pipelines, ports and production.

Reports are saying that US Secretary of State Rubio and WH National Security Adviser Waltz to be in Jeddah Sunday for Russia-Ukraine talks  according to CBS.

The 30-day energy infrastructure truce immediately lowered prices on global markets, that shows once again, that President Trump’s quest to keep oil prices lower is more than just ‘drill, baby drill’. The White House called this a first step in a “movement to peace”. If they can stop the killing and Europe and the US can quit funding this war, then that should help give the global economy some relief that fiscal deficits just will not keep ringing it higher.

Bloomberg reports that more than a dozen oil companies will deliver a message of gratitude — as well as caution — when they meet with President Donald Trump on Wednesday.

Industry leaders say they have plenty of reasons to give thanks. Trump is an unabashed champion of US oil and gas production who has vowed to unleash the industry’s potential. Only two months into office, he’s already taken steps to begin unwinding policies that increased operational costs and reduced demand for fuel.

The American Petroleum Institute (API) showed that refiners are still deep in maintenance. The  API reported that crude oil inventory increased by 4.593 million barrels last week while gasoline inventory 1.708 million barrels. Distillates fell by 2.146 million barrels. Yet maintenance will soon be ending and we’ll have a shot to see the reverse of these numbers. On top of that Cushing, Oklahoma was down 1.141 million barrels.

Today not only will we take our cue from the Energy Information Administration but also from the Fed as we wait to see how they respond to recent economic data and trade wars.

Demand expectations rose yesterday after strong economic data. Bloomberg News reported that, “US factory output rose by the highest in a year as a surge in motor vehicle production led to a broader increase that helped ease some concerns about weakening in manufacturing. Manufacturing output, which accounts for three-fourths of total industrial production, jumped 0.9% in February after a 0.1% gain the prior month, Federal Reserve data showed Tuesday.

Standard Chartered said, “We think the oil market has been oversold and trader sentiment is becoming more balanced”.

Natural gas is finding a floor just below $4.00. Jodi Shafto at Energy Intelligence said that April Nymex natural gas futures advanced Tuesday as production worries and strong LNG demand added fundamental support, while hedging may have come into play. Natural Gas Intelligence’s (NGI) spot Waha daily natural gas price graph showing historical market volatility. So go down to Waha and get free gas!

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