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- ⚡Nat Gas Roofs
February 19, 2025
PRESENTED BY: EKT Interactive Oil & Gas Training
Morning,
A quick reminder that EIA crude oil inventories will be reported on Thursday due to the holiday on Monday. Nat gas inventories will also be released on Thurs.
Zelenskiy postponed his trip to Saudi Arabia to not ‘give legitimacy’ to any talks between the US and Russia. But the Trump administration is clearly moving on without any outside participation.
What does that do to the result?
What's in this issue:
Energy Market Recap
Headlines
| Crude Oil (Mar) | $71.85 | +1.11 | +1.57% |
| Natural Gas (Mar) | $4.007 | +0.282 | +7.57% |
| Copper (Mar) | $4.5910 | -0.0735 | -1.58% |
| S&P 500 | 6,129.58 | +14.95 | +0.24% |
| Dollar Index (DX) | 106.58 955 | +0.897 | +0.89% |
Energy Markets
🛢️Oil prices ended higher by 1.57% on the day as the market awaits news out of Saudi Arabia this week.
The presence of Kirill Dmitriev among the Russia delegation in Riyadh for the Washington-Moscow talks suggest that oil is going to be on the table.
Perhaps in the form of US oil sanction relief, or as a quid pro quo opening Russian oil again for American companies | #OOTT
— Javier Blas (@JavierBlas)
8:12 AM • Feb 18, 2025
While there are plenty of eyes (and news) on OPEC+ and Russia, interesting piece out of the EIA this week showing that it isn’t OPEC+ adding barrels to the market:
Source: EIA
“Increasing crude oil production from four countries in the Americas—the United States, Guyana, Canada, and Brazil—drives this growth. Because of ongoing production restraint among OPEC+ countries, we forecast the group’s production to grow by 0.1 million b/d in 2025 and 0.6 million b/d in 2026.”
WTI Spreads
Mar/Apr: +0.02
Apr/May: +0.25
Mar/Dec: +3.15
Dec5/Dec6: +2.65
🔥Natural gas prices ended sharply higher as near-term weather demand remains the driving factor in the market. Prices were up by 7.5% on the day.
Gelber & Associates was quoted in the WSJ saying:
“Weather model runs today confirmed the significant cold forecast for this week but also added a significant amount of warming in a recovery to be seen next week,”
Great read as Europe is expected to accept Russian gas flows in the near future: +Cheap Russian gas in Europe? No such thing - Reuters
PRESENTED BY OIL 101
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Contrarian Look
It’s good to question the ‘prevailing wisdom’. So I thought I would pass this on…
Oil market analyst HFI Research have been writing extensively against the prevailing thought that the oil market will be oversupplied in 2025. In fact, their estimate isn’t even close.
This mainly comes from a thesis that US won’t drill baby drill. In fact, the well-known decline curve of shale production seems to be the culprit.
“I feel like I'm screaming into the void. The data I'm seeing and the narrative I'm reading do not match. In fact, the divide between data and reality is so far apart now, that the bulls and bears are at two extremes.”
Headlines
“From an office building in New Hampshire, roughly a dozen people facilitate the trading of billions of eggs a year, a task that shapes what Americans pay per dozen at the supermarket or for omelets at diners.”
+At the ‘Wall Street of Eggs,’ Demand Is Surging - WSJ
“Double Eagle is the most attractive asset remaining in the Midland Basin,”
+Diamondback Energy to Acquire Double Eagle - WSJ
“The resumption of shipments would increase Iraq’s oil supply by around 300 thousand barrels per day,” Carsten Fritsch says. “Iraq has no leeway to increase oil production if it does not want to violate its production ceiling.”
+Kurdistan Oil-Export Resumption Could Pose Challenges for Iraq - WSJ
“In a report released last week, the International Energy Agency said India’s natural gas consumption would increase by nearly 60 per cent by 2030, with LNG imports set to more than double in the same period”
+Modi-Trump energy pledge signals bonanza for US gas exporters - FT
“Ukraine has large underground deposits worth up to $11.5tn of critical minerals, including lithium, graphite, cobalt, titanium and rare earths such as scandium, that are essential for an array of industries from defence to electric vehicles.”
+The Ukrainian mineral riches in Donald Trump’s sights - FT
Economic Calendar
Monday -
Tuesday -
Wednesday - Housing Starts, FOMC Minutes,
Thursday - Natural Gas Storage Report, Jobless Claims, Crude Oil Storage Report
Friday - Consumer Sentiment, Existing Home Sales