Daily Energy Market Update 3-12-2025

Crude is up 91 cents????? RB is up 2.40 cents????? ULSD is up 1.52 cents

Overview

Energies are higher with today's narrative being the same as was seen yesterday. Energies are up on the back of a weak dollar, although gains remain capped by growing concerns over global trade. Support was also seen coming from the EIA's STEO seen yesterday in which they spoke of tighter crude inventories in Q2 2025 in part due to decreasing production in Iran and Venezuela.

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

Crude Oil????? +1.2/+2.23????? +4.247??

Gasoline???????? -1.1/-1.9??????? -4.560

Distillate?????? -0.8/+0.18????? +0.421

Cushing???????????? n/av???????????? -1.196

Runs???????????? -0.2/+0.6%???????? n/av

Today's U.S. CPI data came in better than expected propelling WTI to the high for the session. February inflation was +0.2%--versus expectations for a reading of +0.3%. The year on year inflation came in at +2.8%, better than the expected +2.9% forecast.

OPEC in today's monthly oil report kept their demand and supply forecasts for 2025 and 2026 unchanged from last month. Demand growth in 2025 is seen at +1.43 MMBPD and +1.45 MMBPD in 2026. Non-OPEC supply growth is seen at +1.0 MMBPD in 2025 and 2026.

On Tuesday , President Trump said that tariffs on Canadian steel and aluminum products would be raised to 50% in retaliation for the Ontario Premier's 25% on electricity sent to the U.S.

A Platts survey showed OPEC and OPEC+ production rose in February. OPEC+ production was seen up 440 MBPD to 40.98 MMBPD. The increase was seen mostly due to a 270 MBPD rise in Kazakhstan's production. Countries with quotas were seen over producing by 294 MBPD, up from overproduction in January of 71 MBPD. OPEC output was seen having risen by 160 MBPD to 26.85 MMBPD in February.

Platts also reported that Libyan oil production has risen to a 12 year high. February output was seen at 1.2 MMBPD, which is the most since June 2013, but is still below the 1.6 MMBPD that was produced in 2011 when Qaddafi ruled Libya. A March 8th update to Libyan output saw it at 1.383 MMBPD. Libya's crude oil exports were seen at 1.2 MMBPD. which is the most since September of 2022.

Crude flows from all Russian ports in the four weeks to March 9 jumped by about 300 MBPD, the biggest gain since January 2023, as per Bloomberg reporting. Bloomberg says "U.S. sanctions starting to crumble." In recent days, they say, 3 blacklisted vessels loaded cargoes and sailed from their main Pacific port. And more boats are said to be leaving anchorages, where they've idled since being sanctioned.

The EIA's STEO issued Tuesday saw them write : " We expect global oil inventories will fall in the second quarter of 2025 (2Q25) in part due to decreasing crude oil production in Iran and Venezuela. As a result, the Brent crude oil spot price in our forecast rises from about $70 per barrel (b) to $75/b by 3Q25. However, we expect oil inventories will build and place downward pressure on crude oil prices in late-2025 and through 2026 when we expect OPEC+ unwinds production cuts and non-OPEC oil production grows. As a result, we forecast the Brent crude oil price will fall to an average of $68/b in 2026. " Yet, the estimate for Brent for 2026 was raised to $68.47, which is up $2.01 from last month. The WTI 2026 price forecast was raised even more. WTI is seen averaging $64.97 in 2026, which is up $2.11 from last month's estimate. The prices for 2026 are seen down from the 2025 estimates for WTI of $70.68 and for Brent of $74.22.? They estimate that U.S. oil production will average a record 13.59 MMBPD in 2025 and rise to 13.73 MMBPD next year. These forecasts were up 2 MBPD and 3 MBPD from last month's forecast. Global oil demand for 2025 is unchanged from last month at 104.1 MMBPD. Global oil production for 2025 is seen at 104.2 MMBPD, which is down 0.4 MMBPD from last month. The global production forecast for 2026 is also down from last month by 0.4 MMBPD at 105.8 MMBPD. Global demand in 2026 is seen at 105.3 MMBPD, up 0.1 MMBPD from last month.

ConocoPhillips' CEO? said on Tuesday at the CERAWeek energy conference in Houston that U.S. oil production will plateau later this decade and will stay on the plateau for some time. Occidental Petroleum's CEO gave a similar view, saying U.S. oil production will peak between 2027 and 2030.? (Reuters/LSEG)

WTI open interest on the CME fell by 18,976 contracts in Tuesday's activity, driven primarily by a fall in April 2025 open interest of over 22,000 contracts, which we see as mostly short covering.

In the LO/WTI options we see a size trade having been done in the July through December strip. The one month calendar call spreads traded. The 25 cent call was bought versus selling twice as many $1.00 calls for a cost of 3 cents.?

Technicals

Technically WTI and ULSD have seen their DC chart based momentum turn positive from oversold conditions.

April WTI support is seen at the double bottom at 65.22-65.27. Resistance lies at 68.22 and then at 69.13-69.16.

RB support for April lies at 2.0993-2.1003 and then at 2.0717-2.0722. Resistance is seen at 2.1502-2.1505 and then at 2.1744-2.1755.

ULSD for April sees support at 2.1649-2.1667. Resistance comes in at 2.2487-2.2494.

Natural Gas --NG is down 22.5 cents

NG prices are lower with the move down below the 4.42 support area seeing DC chart momentum turn negative. The retreat in prices is seen due to the Ontario Premier having backed down on slapping a 25% tariff on electricity supplied to the U.S. The transition to milder weather is a likely weight on prices as well.

The premier of Ontario, Canada, has agreed to suspend its 25% surcharge on electricity exported to Michigan, Minnesota and New York, as a meeting is planned for Thursday between the U.S. Commerce Secretary and the Premier to discuss a renewed USMCA [United States-Mexico-Canada Agreement] ahead of the April 2 reciprocal tariff deadline.

On Tuesday, Forecaster Atmospheric G2 said Tuesday that forecasts have shifted warmer in the northern and western parts of the US for March 16-20.? (barchart.com)

The EIA's STEO issued Tuesday saw noticeable changes in the price forecasts for 2025 and 2026 for natural gas. The EIA wrote : "? Because we now expect more consumption of natural gas in 2025 and 2026 and less natural gas in storage, we have raised our forecast Henry Hub spot price." In 2025, gas is seen averaging $4.19, up 40 cents versus last month's forecast and the forecast for the average for 2026 was raised by 31 cents to $4.47. These raises come on top of those seen last month of 65 cents for 2025 and 19 cents for 2026. The EIA reduced their March 2025 EOS storage forecast to 1.694 TCF, down from February's estimate of 1.809 TCF. They also reduced their October 2025 end of injection season inventory forecast. The now see storage in October at 3.606 TCF, down from last month's estimate of 3.680 TCF.

On Tuesday, Celsius Energy provided the following data regarding gas storage on a daily basis. "As unseasonably mild temperatures dominate the Lower 48 today, I am projecting the season’s first daily gas storage injection at +1 BCF/day, nearly 6 BCF bearish vs the 5-yr average (though preliminary intraday supply/demand numbers are suggesting an even larger build)."

TTF gas prices in Europe have rebounded from the low seen last Friday when the chart gap below 37 Euro was filled. Prices have rebounded as traders grow more cautious about the prospect of a peace deal between Russia and Ukraine. “With the heating season coming to an end, the specter of refilling storage sites amid a competitive market for LNG cargoes is likely to keep volatility high,” ANZ Research analysts say. Also, the recent rally in the NG/U.S. gas futures has likely supported the TTF as the U.S. has become such a key supplier of LNG to Europe.

Noticeable from Tuesday's NG settlements on the CME is the fact that the strip from April 2025 to October 2025 settled lower, while the strip from November 2025 to March 2027 settled higher on the day, underscoring again we believe the notion that storage will not fill amply for the coming winter season and months beyond.

In the NG/LN options, the May call open interest fell with noticeable declines in the $4.50 and $5.00 calls.

Technically, the fall in prices seen the past 2 days has caused momentum to turn downward. Prices over $4.50 seem unsustainable. Support at 4.225-4.230 has been pierced as we write. Below this we see support at 4.132-4.141. Resistance lies at the overnight high at 4.377-4.379 and then at 4.471-4.476.

Disclaimer

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