⚡Maximum Pressure

February 5, 2025

PRESENTED BY: COMMODITY RESEARCH GROUP

Jared Kushner, fresh off his big score in Albania, is probably already making plans for that prime oceanfront property in Gaza as Trump signals he’s ready to make a land grab.

As quoted in the WSJ:

“The U.S. will take over the Gaza Strip,” Trump said during the press conference alongside Israeli Prime Minister Benjamin Netanyahu at the White House. “I do see a long-term ownership position, and I see it bringing great stability to that part of the Middle East, and maybe the entire Middle East.”

Here we go…

~Doug​

What's in this issue:

• Energy Market Recap

• EIA Expectations

• Headlines

ENERGY MARKETS

🛢️Oil prices ended higher by .63% but over $2 off its session lows after Trump wouldn’t rule out supporting Israel on strikes on Iran.

“Maximum pressure” on Iran was actually something that was assumed had a strong possibility when Trump was elected. It was always just a matter of time before this issue made it to the forefront.

More below…

WTI Spreads

Note the collapse of the first two spreads as the front month is now just whipsawing on headlines. Back of the curve has no idea what to do with all of this. Mar/Dec has moved in a buck.

Mar/Apr: +0.36
Mar/Dec: +4.38
Dec5/Dec6: +2.73

🔥Natural gas prices pulled back by about 3% after the big move higher a couple of days ago.

While there is still some cold in the forecast, it is in the further-out 8-13 day period. That leaves a lot of room for change, possibly putting a cap on the market for now.

PRESENTED BY COMMODITY RESEARCH GROUP
EIA Expectations

Last week we shared the latest oil market analysis by Commodity Research Group. Today we have veteran oil analyst Andy Lebow’s expectations for today’s EIA inventory data.

Andy expects crude inventories to build by 1.8 million barrels, just shy of the 2.0 million consensus number. He also expects gasoline to build by 1.6 mm and distillates to draw by 1.1 mm.

CRG also has refinery runs higher by 1.5.

Thanks Andy.

MAXIMUM PRESSURE

Trump has turned his eye on Iran. It was just a matter of time as this was widely expected once he was elected, and is a follow through on the policy he pursued in his first term.

A directive has been signed putting the new Treasury Secretary on the case to find a package of new sanctions and tougher enforcement that will bring the country to the negotiating table.

Iran is already suffering economically. However, a lack of pressure during the Biden administration allowed Iran’s exports to recover by 1 million barrels a day, with most of the oil going to China.

As Bloomberg puts it, the move “could blow a $30 billion hole in Iran’s economy”.

HEADLINES

“The pipeline, which can carry up to 890,000 barrels per day of crude from Alberta to Canada's Pacific Coast, has been about 80% utilized, with about 20% capacity available for spot shipping at more expensive rate.”
+Canada's Trans Mountain expects more interest in pipeline system if US implements tariffs - Reuters

“Grain futures trading in Chicago settled higher Tuesday, continuing the positive momentum that grain futures have all had since the start of the year, with corn rising 8%, soybeans up 6%, and wheat up 5% since Jan. 1.”
+How U.S. Agriculture Market Is Approaching Tariffs and a Potential Trade War - WSJ

“I want this operation to be sold in order to invest in clean energy in Colombia, to be discussed technically, and economically,”
+Colombia's Petro calls for sale of Ecopetrol fracking operations in US - Reuters

“The average LME cash aluminium price rose by 4.9% year-on-year in 2024 and is set to climb another 6.3% to $2,573.50 per metric ton in 2025, according to the median forecast of 33 analysts participating in the January poll.”
+Aluminium is base metals analysts' bull pick for 2025 - Reuters

ECONOMIC CALENDAR

Monday - PMI, ISM
Tuesday - Job Openings, Factory Orders, Fed Atlanta & San Fran speak,
Wednesday - ADP Employment, Crude Oil Storage Report
Thursday - Natural Gas Storage Report, Jobless Claims, Fed speakers
Friday - Employment