⚡Risk is to the Upside

February 28, 2025

PRESENTED BY: POWERING THE FUTURE

Morning everyone,

Jobless claims came in above expectations, compounding the bad consumer confidence number earlier in the week. Nvidia lost $274 billion in market cap, and the SP500 is now down for the year.

Economist Mohamed El-Erian was all over Linkedin talking about stagflation.

Mexico is delivering drug kingpins, and Panama is auditing Chinese port operators, but in Canada things are swinging the other way:

“It is the first time the Liberals are in the lead for four years,”
+Donald Trump revives Canada’s Liberals in electoral turnaround - FT

But crude was up! Let’s take a look…

~Doug​

What's in this issue:

• Energy Market Recap

• Risk is to the Upside

• Headlines

Energy Markets

🛢️WTI rallied 2.5% as the market digested the news targeting Venezuelan oil production. Within the oil complex, Mars grade oil, a medium-sour crude benchmark, rose dramatically relative to WTI as Gulf Coast refiners are expected to feel the loss of Venezuelan oil.

WTI Spreads

Apr/May: +0.40
Jun/Dec: +2.79
Dec5/Dec6: +2.26

🔥Natural gas ended lower by .63% as the market yawned at the expected draw in inventories. The EIA reported a draw of 261 bcf, largely in line with expectations.

Inventories are now 561 bcf below where they were at this time last year, however expectations are for injections to resume as normal in April.

PRESENTED BY POWERING THE FUTURE
A curated course featuring today’s most relevant topics

Powering the Future pulls together content from across our Oil 101, Power 101, and Renewables courses. These lessons dive into the topics that are driving headlines and capital flows today.

Modules include introductions to natural gas, LNG, nuclear power, hydrogen, energy storage management, renewable power generation, and the grid.

The Risk is to the Upside

While Vitol is the world’s largest oil trader, Trafigura is certainly no slouch. And if you read Javier Blas’ “The World For Sale” like I’ve recommended many times, you would know that until recently you would never have heard the head of trading from one of these companies doing interviews.

But it’s a new era and if Trafigura’s Global Head of Oil wants to tell you what he’s watching, you should take the opportunity to listen.

China and Iran, and China

You’ll notice that the interviewers keep trying to steer the conversation in different directions, but Luckock just brings it back to two things - Iran and China.

He points out that despite heading towards peace in Ukraine and tensions calming in the Middle East, nothing in the pipeline has anything to do with deescalating tensions with China.

Speaking of: Trump Plans Another 10% Tariff on Products From China - WSJ

Headline

“The agency said a company can receive full credit if its disclosure is voluntary, timely, complete and made directly to the CFTC.”
+CFTC Offers New Incentives for Companies to Report Their Own Wrongdoing - WSJ

“The administration proposes charging Chinese ocean carriers $1 million each time a containership enters a U.S. port. It also proposes charging any carrier a fee of between $500,000 and $1.5 million for each port call by a Chinese-built vessel.”
+How Charging Chinese Ships Could Ripple Through the Economy - WSJ

“The Senate passed the resolution under Congressional Review Act process, which allows Congress to reverse new federal rules with a simple majority, effectively overturning the escalating charge on oil and gas producers set by the agency they have called a tax.”
+Congress kills Biden era methane fee on oil, gas producers - Reuters

Economic Calendar

Monday -
Tuesday - Case-Schiller, Consumer Confidence
Wednesday - New Home Sales, Crude Oil Storage Report
Thursday - Natural Gas Storage Report, Jobless Claims, GDP
Friday -