⚡Ceasefire Lite, FOMC Meets

March 19, 2025

Morning everyone,

Ceasefire talks have ended for now with Russia agreeing to a limited ceasefire which wil halt attacks on Ukrainian energy infrastructure. However, a broad 30-day ceasefire was rejected by Putin and it seems attacks on other targets began immediately.

Equity markets gave up Monday’s gains ahead of today’s FOMC meeting. Gold closed at a new high above $3,000 an ounce.

~Doug​

What's in this issue:

• Energy Market Recap

• CERAWeek Gloom

• Headlines

Energy Markets

🛢️WTI ended lower by 1%, giving up an overnight rally that pushed prices towards $69.

EIA inventory data due out later today. Expectations are for a build of 500,000 barrels.

WTI Spreads

Apr/May continued its slow, steady march towards contango.

Apr/May: +0.15
Jun/Dec: +2.14
Dec5/Dec6: +1.27

🔥 Natural gas closed higher by .85% as prices continue to consolidate just above $4. Low heating demand coupled with concerns of low inventories have prices in a holding pattern for now.

The market wants to see some signs that production has ticked up as prices have moved higher, but there is no evidence just yet.

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CERAWeek Gloom

“In just a few weeks since Wright’s appointment, the industry has also realized that he’s not “our guy,” as many had – wrongly -- assumed; he’s “Trump’s guy.”

CERAWeek headlines have dripped through the newsletter over the last week, and for good reason. It is one of the most important events in the energy world.

It’s also 10 grand to attend, so any information dripping out from attendees is worth paying attention to.

So what was the mood this year?

Energy execs are waking up to the idea that when Trump says he wants $50 oil, he means it. And, like the destruction an ‘economic transition’ is inflicting on other parts of the economy, if that price hurts some players in the industry, so be it.

“There’s a lot less optimism,” Scott Sheffield, former CEO of Pioneer Natural Resources told Bloomberg’s Javier Blas.

While the industry has welcomed the new administration and a light-handed regulatory approach, the President’s desire for lower oil prices doesn’t sit quite as well.

As Claudio Galimberti, chief economist at Rystad Energy told the FT:

“Fifty dollars a barrel is going to hurt the United States more than benefit it, and it’s definitely not going to allow the US to produce more oil, which is something that Trump also wants to see,”

Get the Scoop

Jason Bordoff of Columbia’s Center for Energy Policy sits down with Bloomberg’s Javier Blas and Ben German of Axios.

The discussion (podcast linked below) is worth taking some time to listen to. Topics range from oil prices and OPEC+ policy to LNG realities and pipe(line) dreams.

Even coal is discussed, noting the lack of presence at the conference despite one exec predicting that China will use more coal in the next decade than the US has used in its entire history.

Headlines

“Mixed contracts, which sources told Reuters would likely be used for Ixachi, are a new form of partnership between Pemex and private companies. These allow Pemex to work with private companies, complementing its own expertise and capital, while retaining ownership of resources.”
+Mexico's Pemex is in talks with Slim about Ixachi investment, president confirms - Reuters

“The revised court decision sends the Federal Energy Regulatory Commission's order regarding the first five liquefaction trains at the Rio Grande LNG facility back for further review, while the order itself remains in place.”
+US court revises energy regulator's order for NextDecade's Texas LNG facility - Reuters

“So it’d be a great thing for price, but probably a horrible thing for the industry,”
+America is facing a beef deficit - Economist

Economic Calendar

Monday - Retail Sales
Tuesday - Housing Starts, Cap U
Wednesday - Crude Oil Storage Report, FOMC
Thursday - Natural Gas Storage Report, Jobless Claims, Existing Home Sales
Friday -