⚡Let the Real Negotiations Begin

March 14, 2025

Morning everyone,

Jobs and PPI data came in without any drama, although it confirmed the cooling CPI number from Wednesday.

None of it was enough to stop equity markets from resuming their slide lower.

Defensive sectors like utilities (XLU) continue to hold up well in the face of the selloff. Unsurprising, perhaps considering the macro tailwinds benefiting the sector.

~Doug​

What's in this issue:

• Energy Market Recap

• Let the Real Negotiations Begin

• Headlines

Energy Markets

🛢️WTI ended the day lower by 1.67% as prices consolidate around this major support level.

It’s going to take a big effort, to push through so we’re waiting for the right headline.

WTI Spreads

Apr/May: +0.28
Jun/Dec: +2.23
Dec5/Dec6: +1.33

🔥Natural gas prices eked out a gain, closing higher by just .66%.

Prices rallied after the EIA reported another draw in inventories (-62 bcf), but the market couldn’t hold the gains and prices slid the rest of the session.

Inventories now sit 628 bcf below this time last year and 230 bcf below the 5 year average.

It’s Not Just LNG

The EIA’s Today in Energy report highlighted that it isn’t just LNG exports that are growing. Apparently, exports of propane have been steadily increasing since 2007.

According to the report:

“Annual U.S. propane exports to Asia grew 13% in 2024 compared with 2023, a 131,000-b/d increase, with most going to Japan, South Korea, and China. Chinese consumption accounts for most of the growth in U.S. exports to Asia; U.S. propane exports to China grew by 40% in 2024.

Increasing propane exports to Asia are driven in part by the region’s increasing demand for propylene. Propylene is used to manufacture polypropylene, a versatile plastic used in many products including car interiors, packaging, and personal protective equipment.”

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Let the Real Negotiations Begin

Despite all of the drama that played out between Trump and Zelensky, getting this initial ceasefire agreement in place wasn’t much of a negotiation. The next step is sure to prove more difficult, even if it makes for less interesting TV.

Putin is bound to haggle of every detail, using the process itself to drag the war on and making outrageous demands along the way. And why not, he just might get everything he wants.

According to the FT:

“Putin has called for Ukraine to recognise Russia’s annexation of four partially occupied south-eastern regions and the Crimean peninsula, withdraw its troops from those areas and pledge to never join Nato as preconditions for the ceasefire.

Russia is also pushing for caps on Ukraine’s military, protections for Russian speakers in the country and fresh elections to replace President Volodymyr Zelenskyy.”

Headlines

“Letting the license expire “will significantly gum up the works of Russia’s oil and gas revenues,” said Edward Fishman, a former State Department official who worked on Russia sanctions in 2014.”
+US Quietly Tightens Russia Sanctions as It Seeks Ceasefire Deal - Bloomberg

“The Panamanian president spent recent weeks meeting with local businesses that relied on Cobre Panama and hearing from workers that were impacted by its closure.”
+Panama Signals It’s Ready to Negotiate on Shuttered Copper Mine - Bloomberg

“Seaborne fuel exports from Gulf OPEC+ members Iraq, Kuwait, Oman, Saudi Arabia and the United Arab Emirates hit at an all-time high in 2024 of 5.51 million barrels per day (bpd) on average, data from Kpler and OilX show, more than 7% higher than the previous year.”
+Record OPEC+ fuel exports blunt group's crude supply cut - Reuters

Economic Calendar

Monday -
Tuesday -
Wednesday - CPI, Crude Oil Storage Report
Thursday - Natural Gas Storage Report, Jobless Claims, PPI
Friday - Consumer Sentiment