Daily Energy Market Update 2-17-2025

April WTI is up 18 cents???? April RB is up 0.83 cents????? April ULSD is down 1.41 cents

Overview

WTI prices are higher now? after overnight having made a fresh low for the recent price action. WSJ commentary has the slide today reflecting "subdued demand for physical oil." In addition, Ukraine Russia peace talks "loom" Reuters says, which weighed on prices. Also, Russian Deputy Prime Minister Novak says there are no talks ongoing about a delay to OPEC+ bringing back output in April. And ING is reporting that there may be a resumption in crude exports from Kurdistan.

President Trump and his administration officials announced they had begun discussions with Russia to end the war in Ukraine. Trump said on Sunday he believes he could meet very soon with Russian President Vladimir Putin to discuss ending the war in Ukraine. "Should sanctions relief allow it, we believe Brent crude oil prices could drop between $5 and $10/bbl if Russian barrels suddenly do not need to make a long journey to India or China, and more supply is suddenly made available," BofA analysts said in a note. "Global refining margins could fall as well. While margins have been normalizing since the Ukraine War started, they could go even lower under sanctions relief for diesel," the analysts added.? (Reuters)

Even as Bloomberg News reported that OPEC+ is considering delaying monthly supply increases set to begin in April, Russia's Deputy Prime Minister Novak said that there are no talks ongoing about delaying bringing back output, as per Bloomberg news.

Time spreads have weakened significantly since peaking in January, suggesting that the tightness in the physical market is easing. While the prompt ICE Brent spread is still in backwardation, the NYMEX WTI prompt spread has flipped back to a small contango. (ING) Today, the March April front spread in WTI printed -1 cent. That is the first contango spread print in the front seen since November 19. Momentum though is getting oversold, thus suggesting that values in contango will be hard to sustain.

Oil exports from Iraq’s Kurdistan region could resume in March, which could see exports of around 300k b/d through the Ceyhan pipeline. Flows were halted in early 2023 after a payment dispute between Iraq and Turkey. However, this is not the first time we have heard suggestions that exports could restart. In addition, if flows were to resume it would complicate issues around Iraqi output and its compliance with production targets under the OPEC+ deal. (ING)

CFTC data from Friday's report shows money managers shed a total of 27,099 contracts of WTI length on ICE/CME combined in the week ended Tuesday Feb. 11. This was achieved through longs being liquidated on ICE and new short positions being added on the CME. Length was added though in RB & ULSD. RB net length rose by 1,910 contracts, while ULSD net length rose by 7,785 contracts as mostly new longs were added. There was little change in speculative positioning in ICE Brent, with the net long cut by just 569 lots, as per ING reporting.

Today will see shorter trading hours on the CME with a halt in trading from 2:30 to 6 PM NY time. All trades executed today will be for settlement tomorrow Tuesday Feb. 18.

Technicals

Technically, the momentum for the energies on the April daily charts have turned negative. The lows of today's session were made soon after the opening last night.

April WTI support lies at 70.12-70.16 which are the overnight and Thursday lows. Below that support comes in at 69.38-69.41. Resistance is seen at 71.46-71.52 and then at 72.18-72.22.

April ULSD support lies at 2.3679-2.3696, which was tested with the overnight low of 2.3680. Below that support is seen at 2.3472. Resistance comes in at 2.4084-2.4105 and then at 2.4210.

RB for April sees support at 2.2939-2.2949 and then at 2.2770-2.2787. Resistance is seen at 2.3323-2.3342 and then at 2.3468-2.3471.

Natural Gas- NG is down 10.4 cents

NG spot futures are lower as the 10-14 day weather forecast will see temperatures return to normal and above normal. The low of the overnight session was seen on the opening last night.

As per Celsius Energy commentary overnight : " the late-Feb & early March outlook looks more seasonable with at or below-average GWDDs."

The TTF European gas marker has stabilized for now, after falling by a little more than 9% last week. Ukraine peace talks "weighed on sentiment", as per ING commentary. In addition, there are ongoing discussions around flexibility with regards to storage refill targets. There is still little clarity over whether Germany will subsidize storage refills and, if so, how it will be done. (ING)

Technically momentum remains negative for the spot TTF futures on the DC chart.

CFTC data from Friday's report shows money managers added a lot of new net length (+25,867 contracts) in NG futures/options on the CME in the week ended Tuesday Feb 11. This was achieved through buying of new longs.

Notable from Friday's trading activity on the CME is the large open interest increase in the April put options. Open interest rose by 15,570 contracts with several strikes seeing large increases--most notably the $3.50 and $3.35 strikes. One larger trade seen showed the $3.00 put in April was purchased against selling of double the $2.75 puts for a total cost of 0.5 cents.

Technically the March NG futures contract has been repelled from the test of the upper bollinger band on its daily contract, with its momentum overbought and poised to turn lower. Support for the March futures lies at 3.581-3.588 and then at the 3.500 area. Resistance comes in at 3.733-3.738 and then at 3.770-3.771 via the 60 minute chart for March.

Disclaimer

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