Daily Energy Market Update 1-29-2025

Crude is down 54 cents?????? March RB is down 1.19 cents?????? March ULSD is down 1.42 cents

Overview

Energies are lower as President Trump is still planning to impose tariffs on Canada and Mexico starting this Saturday. Also weighing on prices today is the crude oil build seen in last night's API data. Gasoline supplies built more than expected, while distillate supplies fell more than forecast. Libyan export disruption worries have receded.

API???????????????? Forecast???????? Actual

Crude Oil???? +1.1/+3.2??????? +2.86

Gasoline???? +0.138/+1.4???? +1.89

Distillate????? -2.2/-2.6????????? -3.75

Runs??????????? -0.2/-0.9%???????? n/av

Cushing???????? n/av?????????????? -0.144

The White House confirmed Jan. 28 that there are plans to impose tariffs on Canada and Mexico from Feb. 1. Canada supplied 3.9 million barrels per day of oil to the U.S. in 2023, roughly half of overall imports for the year, while Mexico supplied 733 MBPD, according to data from the EIA.

OPEC+ is expected to stick with their current supply policy at the Joint Ministerial Monitoring Committee to be held next week (Feb. 3), resisting pressure from Trump to boost production and bring down crude prices. OPEC+ currently plans to revive production in modest monthly tranches of about 120 MBPD from April, for a total return of 2.1 MMBPD by late 2026. The cartel is likely to review the April increase before proceeding, finalizing its decision in time to notify customers of cargo loading programs in early March. Ministers from the full 22-nation alliance are due to meet on May 28 to consider supply policy for the second half of the year. OPEC remains wary of oversupplying global oil markets, which already face a surplus this year as a result of slowing demand growth and swelling supply across the Americas. At about $78 a barrel, crude prices are too low for many members to cover government spending. (TT News.com)

Oil prices fell off yesterday after Libya's National Oil Corp said export activity was running normally after it held talks with protesters, thus not jeopardizing the nearly 450 MBPD of crude exports that had been threatened due to protests. (Reuters)??

Technicals

Technically, the energies are still trading within the large price range seen Monday. The downside momentum for WTI on the DC chart is starting to wane.

There is a double bottom for the WTI spot futures from yesterday/today at 72.93. Below that support lies at the low of Monday at 72.38. Resistance comes in at 74.31-74.35 and then at 75.15-75.21.

March RB support lies at 2.0369. support is likely at the double bottom from yesterday/today at 2.0512-2.0520. Resistance comes in at 2.0918-2.0922.

ULSD for March see support at 2.3550. Below that good support is seen at 2.3215-2.3236. Resistance comes in at 2.4185.

Natural Gas-March NG is up 0.9 cents

Natural Gas for March are near unchanged after sliding overnight to a fresh low for the recent move as warmer weather forecasts weakened prices. The storage deficit is seen shrinking over the next few weeks. This all comes even as this week's EIA storage number will show a rare draw over 300 BCF. The expiring February contract is trading lower this morning amid the warmer forecasts.

The NOAA forecast still shows above normal temperatures in the south but colder in the north throughout the 6-14 day forecast. Yet, overall, meteorologists projected weather in the Lower 48 states would remain mostly warmer than normal through Feb. 12, as per Reuters reporting yesterday. This seemed to be the catalyst for the move lower in NG futures pricing yesterday.

U.S. domestic natural gas production is estimated up to the highest since Jan. 3, prior to the winter storm disruption last week, at 105.4 BCF/d today, according to Bloomberg.

The negative tone of the NG futures market is evidenced by the March April spread having slipped this week to a fresh contract low. The contract has fallen to a low of March 3.9 cents below April. The daily chart shows that to be the low each of the past 3 trading sessions. Momentum for March losing further against April is getting oversold. A settlement back to a discount of less than 2.9 to 3.0 cents for March versus April would signal to us that a near term low is in place.

With the mild weather coming, LSEG forecast on Tuesday that average gas demand in the Lower 48 states, including exports, would fall from 137.2 BCF/d this week to 131.0 BCF/d next week. These forecasts were down a total of 3.9 BCF/d from those seen Monday.? Lower 48 natural gas demand has fallen to near normal levels at 100.8 BCF/d today, according to Bloomberg, Today is the last trading day for the February NG futures.

The February TTF European futures have gapped higher today ahead of the contract's expiration tomorrow. The gap goes from 48.830 to 48.925 Euro/Mwh. TTF prices are supported by cooler, less windy weather and Norwegian supply issues, despite the current low withdrawal rates. (Market News)? The higher TTF price comes even as the majority of European regasification capacity now is seen as being in the money, potentially leading to more flexible LNG cargoes heading to Europe, Spark Commodities reports. European gas storage has fallen to 55.46% full on Jan. 27, according to Gas Infrastructure Europe. European gas storage is expected to be 27% full by end-March, rising to 70% by end-September, just enough to meet storage targets, Bloomberg reports. (Market News)

Resistance for the spot TTF futures lies at 51.00 Euros. Above that resistance lies at 53.50-53.66 Euros from highs from the summer of 2023. Support comes in at the 47 Euro area.

March NG futures have negative momentum. Support basis the daily March chart lies at 3.037-3.041. Resistance comes in at 3.204-3.208 and then at 3.254. Notable today is the low of 3.062 as this was within 2 ticks of the .618 Fibonnacci retracement of the move from the 2.623 low from December 17th to the high of 3.778 seen on January 16th. This is a supportive element if the 3.062 low from today holds.

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