- Energized
- Posts
- ⚡Inventories Build for 3rd Week
February 13, 2025
PRESENTED BY: ENERGY 101
Tight global oil inventories continue to square off macroeconomic damage due to tariffs and general uncertainty.
Analyst John Kemp points out in his latest post that fund managers have accumulated a net long position of 308 million barrels, reversing a net short position back in September.
So far, threats of tariffs have been enough. We’ll see in early March if this negative cap on oil is lifted more permanently.
What's in this issue:
Energy Market Recap
EIA Reports Build
Trump, Putin to Meet
Headlines
| Crude Oil (Mar) | $71.37 | -1.95 | -2.66% |
| Natural Gas (Mar) | $3.615 | +0.050 | +1.46% |
| Copper (Mar) | $4.7045 | +0.1035 | +2.25% |
| S&P 500 | 6,051.97 | -16.53 | -0.27% |
| Dollar Index (DX) | 107.82 | -0.01 | -0.01% |
ENERGY MARKETS
🛢️Oil prices declined by 2.7% as the EIA reported another larger than expected build. Inventories grew by 4.1 million barrels according to this week’s storage report. Expectations were for a build of around 3 mm.
This was the third consecutive weekly gain in oil inventories.
The Gulf Coast region grew by 4.5 million barrels while Cushing grew by 900k.
Gasoline showed another build, but cold weather continues to draw on distillate stocks that are now 11% below their 5-year average.
Source: EIA
WTI Spreads
Spreads continued to show weakness on this move lower with the front month moving closer to contango territory.
Mar/Apr: +0.13
Mar/Dec: +3.05
Dec5/Dec6: +2.46
🔥Natural gas prices continued their relentless, but steady, march higher ending up 1.5% on the day. This latest move has now taken prices 20% higher from recent lows at $3.00.
More inventory draws are expected as cold weather is in place for much of the central US.
Expectations are for a draw of 96 bcf in todays inventory report.
Warm Winter in China
Yesterday we highlighted the rising cost of gas and power in Europe. According to analyst John Kemp (yes, you should subscribe to his newsletter), things could have been worse:
“Beijing has experienced 1541 heating degree days so far this winter which is 10% lower than in the winter of 2023/24 and also 10% below the average for the last ten years. North China’s mild winter and LNG resales have averted a much more severe depletion of gas inventories and even higher prices in Northwest Europe.”
So there’s that…
PRESENTED BY ENERGY 101
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TRUMP, PUTIN TO MEET
Trump often proclaimed during his campaign that he could end Russia’s invasion of Ukraine in one day.
While he has certainly been busy during his first weeks in office, this particular issue hasn’t received much attention. Until now…
“The president told reporters in the Oval Office on Wednesday that he and Putin would meet in Saudi Arabia. The talks will be hosted by Crown Prince Mohammed bin Salman.”
This announcement followed a 90-minute phone call between Trump and Putin, the first between the leaders of the US and Russia since the invasion on Ukraine in 2022.
It is largely expected that any peace deal would include the lifting of sanctions on Russia’s energy exports and that gas may flow to Europe via pipeline again.
Highly recommend this read by economist Noah Smith:
“If the Ukraine war ended like Finland’s wars, with territorial losses and promises not to join NATO, but with independence and democracy preserved, it will represent a tactical loss but a great strategic victory for Ukraine. It will all but ensure that Ukraine, like Finland after 1944, remains an independent nation into the foreseeable future.”
HEADLINES
“The group’s overall forecast remains significantly more optimistic than others in the industry”
+OPEC Sticks to Oil-Demand View, Flags U.S. Trade Policy Risks - WSJ
“At the end of 2023, Chevron employed 40,212 people across its operations. A layoff of 20% of total employees would be about 8,000 people.”
+Chevron to lay off up to 20% of global workforce - Reuters
ECONOMIC CALENDAR
Monday -
Tuesday -
Wednesday - CPI, Crude Oil Storage Report
Thursday - Natural Gas Storage Report, Jobless Claims, PPI
Friday - Retail Sales