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2 hours ago
The Energy Report. Trump’s Energy Doctrine
By: Phil Flynn | February 24, 2025
Wake me up when the emergency is over. The Trump energy doctrine is in full force impacting not only oil prices but reducing political risk premium at the same time. President Trump is getting ready to power the future of the US economy by calling in for every power plant in the US to raise their capacity by 10-15% for electricity to meet the growing energy needs to expand artificial intelligence across the United States. Trump’s Energy doctrine is moving at lightening speed as even his critics are starting to admit that his policies could have a historic positive impact for US manufacturing and gross domestic product with the possibility of reducing inflation by reducing government waste, fraud and corruption.
Decisive action with efforts to end the Russian Ukraine war as well as sending a signal to Iraq to settle their dispute with Iraq’s semi-autonomous Kurdistan region as they get ready to ramp up maximum pressure on Iran. Trump’s efforts to end Russia’s war in Ukraine should happen a lot quicker than people thought. President Trump stated over the weekend that the US is close to a deal with Ukraine, seeking rare earth minerals or oil to recoup aid money. There was outrage when president Donald Trump called Ukrainian president Vladimir Zelensky a dictator but now this week it’s possible that he is willing to step down.
Reuters reported that Ukrainian president Volodymyr Zelenskyy said on Sunday that he was willing to step down if it meant peace for his country. Reuters wrote that U.S. President Donald Trump has initiated talks with Russia without inviting Ukraine or the European Union to the table. A senior Russian diplomat said Russian and U.S. teams plan to meet for further discussions this week. Europe seems to be stunned the efficiency that Donald Trump is having. In fact according to Reuters, European Union leaders will meet for an extraordinary summit on March 6 to discuss additional support for Ukraine and European security guarantees.
Perhaps taking a cue from conservatives, the German elections in Europe is starting to diversify its energy imports to reduce its dependence on Russia. That should be a positive for the United States of America. The US will be one of the major exporters of oil products and LNG. Reuters reported that NATO is planning to build a pipeline system from Germany to Poland and the Czech Republic to ensure a rapid supply of jet fuel for fighter aircraft in the event of a war with Russia, weekly German magazine Der Spiegel reported. The existing Cold War-era pipeline system of the military alliance currently ends in western Germany.
Der Spiegel cited an internal memo from the Bundeswehr – Germany’s armed forces – as stating that there are, “significant problems in the sustainable fuel supply for forces that would need to be deployed to the eastern border in case of emergency”. Reuters also reported that U.S. President Donald Trump’s administration is piling pressure on Iraq to allow Kurdish oil exports to start or face sanctions alongside Iran, eight sources with direct knowledge of the matter told Reuters. An advisor to the Iraqi prime minister denied in a statement there had been a threat of sanctions or pressure on the government during its communications with the U.S. administration. A speedy resumption of exports from Iraq’s semi-autonomous Kurdistan region would help to offset a potential fall in Iranian oil exports, which Washington has pledged to cut to zero as part of Trump’s “maximum pressure” campaign against Tehran.
Reuters reported that NATO is planning to build a pipeline system from Germany to Poland and the Czech Republic to ensure a rapid supply of jet fuel for fighter aircraft in the event of a war with Russia, weekly German magazine Der Spiegel reported. The existing Cold War-era pipeline system of the military alliance currently ends in western Germany. Der Spiegel cited an internal memo from the Bundeswehr – Germany’s armed forces – as stating that there are “significant problems in the sustainable fuel supply for forces that would need to be deployed to the eastern border in case of emergency”.
Prices dipped last week on rumors of a new outbreak of COVID in a potential new strain. Those reports have not been confirmed, and the market is starting to come back. Oil prices dipped below 70 on the opening yesterday and they’re trying to build the base off of the lower end of the trading range. We anticipate range trading. Please ensure you obtain the trade level to maximize the potential benefits from this situation.
Natural gas prices are dipping on a warmup in the United States, but the question is, will it stay warm long enough to reverse the trajectory of natural gas which had a major breakup on the technical side of the market. Celsius Energy reported that natural gas inventories fell below 1800 billion cubic feet last week, a first since May 19, 2022. Storage is 255 billion cubic feet below the five-year average and 590 billion cubic feet lower than a year ago.
EBW Analytics reported that the March contract spiked to as high as $4.476/MMBtu last week—a full $1.00/MMBtu above the 20-day moving average—as an Arctic blast sent Henry Hub spot prices to $7.79/MMBtu amid soaring demand, 6 Bcf/d of production freeze-offs, and record LNG exports. While the coldest January-February period in a decade has reset the 2025 natural gas market outlook higher, a bearish weekend weather shift may prompt near-term softening this week as weather warms, production rebounds, and the March contract approaches expiration.
Fox Weather reported that, “We’re quickly approaching the start of meteorological spring, and right on cue, forecasters are tracking a major pattern change that will usher in warmer temperatures for most of the U.S. during the week ahead. And let’s face it – we deserve a break from the bitter cold. The nation has been blasted by rounds of frigid arctic air, which has plummeted temperatures to near-freezing as far south as Florida and the Gulf Coast. Winter storms have also brought snow to places that don’t usually see the flakes fly.
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14 hours ago
Oil prices extend losses after weak US data; Russia-Ukraine peace talks weigh
By: Investing.com | February 23, 2025
Oil prices edged lower in Asian trading on Monday, extending last week's slight decline, as weaker-than-expected U.S. economic data raised concerns about softer oil demand, while investors weighed the potential implications of a Russia-Ukraine peace agreement.
Brent Oil Futures fell 0.3% to $74.24 per barrel as of 20:43 ET (01:43 GMT), while West Texas Intermediate (WTI) crude futures lost 0.4% to trade at $69.97 per barrel.
Both contracts inched lower last week, with sharp losses on Friday. Oil had gained earlier in the prior week due to a series of supply disruptions, but the rally faded on Friday as investors weighed the implications of a peace agreement between Russia and Ukraine.
"Trade and tariff concerns, along with a push for a peace deal between Russia and Ukraine, will weigh somewhat on the market," ING analysts said in a note.
Weak US data sparks demand concerns
Recent U.S. economic indicators have raised concerns about a potential slowdown, negatively impacting oil prices.
Friday's data showed that Services PMI fell to 50.4 in February 2025, down from 52.7 in January, indicating minimal growth in the private sector.
Additionally, the University of Michigan's consumer sentiment index dropped to 64.7 in February, a 15-month low, as households grew increasingly worried about proposed tariffs and rising inflation.
These developments suggest a deceleration in economic activity, leading to expectations of reduced energy demand and contributing to the recent decline in oil prices.
Meanwhile, the U.S. is actively trying to mediate peace negotiations between Russia and Ukraine, aiming to resolve the ongoing conflict that has significantly impacted global energy markets.
Recent discussions have involved high-level meetings, including U.S. President Donald Trump's engagement with international leaders to facilitate dialogue.
However, Ukrainian President Volodymyr Zelenskyy has expressed concerns about the negotiations, emphasizing the necessity of Ukraine's direct involvement in any peace agreement.
A successful peace agreement could lead to the lifting or easing of sanctions imposed on Russian energy exports, potentially increasing the global oil supply.
Additionally, the re-entry of Russian gas into the European market may lead to lower natural gas prices and alter the competitive landscape for LNG suppliers.
Supply disruptions cap losses
Oil had risen last week as the Caspian Pipeline Consortium (CPC), a major route for Kazakh oil exports, had reported reduced flows by 30-40% after a Ukrainian drone hit Russia’s Kropotkinskaya pumping station.
Adding to the supply concerns, recent media reports indicated that OPEC producer group and its allies, OPEC+, are considering postponing its planned oil production increases, intensifying concerns about potential supply disruptions in the global market.
Originally, the group had scheduled to begin monthly output hikes in April 2025; however, deliberations are underway to delay these increments.
"Any delay would lead to a change in the oil balance, leaving the market relatively tighter than we expected. Any delay would also likely not go down well with President Trump, who’s calling on OPEC+ to increase supply," ING analysts said.
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2 days ago
WTI Crude Oil CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | February 22, 2025
• Following futures positions of non-commercials are as of February 18, 2025.
WTI crude oil: Currently net long 175.6k, down 25.6k.
Last week, West Texas Intermediate crude ticked $73.68 intraday Tuesday before reversing lower, ending the week with a shooting star. This week, a similar candle formed on the weekly with a high of $73.14 on Thursday. As a matter of fact, until Thursday’s close, the crude was up 2.5 percent for the week. Friday’s 2.9-percent tumble turned this into a week of down 0.4 percent to $70.40/barrel.
This was the sixth consecutive weekly decline. Six weeks ago, WTI reversed lower after tagging $79.39 in a shooting star week. Sellers showed up before reaching the upper bound of a well-established range. For months, it has been rangebound between $71-$72 and $81-$82 before dropping out of the lower bound last September. The range was recaptured as soon as 2025 began.
If $70 is breached – likely – oil bulls can defend a rising trendline from last September’s low and regroup around $68.50.
In the meantime, US crude production in the week to February 14 increased 3,000 barrels per day week-over-week to 13.497 million b/d; output has come under slight pressure since registering a record 13.631 mb/d in the week to December 6. Crude imports dropped 489,000 b/d to 5.8 mb/d. As did gasoline and distillate inventory which declined 151,000 barrels and 2.1 million barrels respectively to 247.9 million barrels and 116.6 million barrels. Crude stocks, however, increased 4.6 million barrels to 432.5 million barrels. Refinery utilization fell one-tenth of a percentage point to 84.9 percent.
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2 days ago
NY Crude Oil Futures (CL) »» Weekly Summary Analysis
By: Marty Armstrong | February 22, 2025
The NY Crude Oil Futures closing today at 7040 is immediately trading down about 1.84% for the year from last year's settlement of 7172. Caution is required for this market is starting to suggest it may now decline on the MONTHLY level. At present, this market has been rising for 4 months going into February suggesting that this has been a bull market trend on the monthly time level. As we stand right now, this market has made a new low breaking beneath the previous month's low reaching thus far 7012 while it's even trading beneath last month's low of 7179.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Crude Oil Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2020 and 2009 and 2001 and 1998 and 1994. The Last turning point on the ECM cycle high to line up with this market was 2022 and 2018 and 2011 and 2000.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The historical broader tone of the NY Crude Oil Futures has been a bearish consolidation following the high established back in 2008. Since then, this market has created 2 reaction highs which have been unable to break this overall protracted bearish consolidating trend. Still, the major low was made in 2023 and the market has bounced back for the last 2 years. The last Yearly Reversal to be elected was a Bullish at the close of 2023.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Looking at the indicating ranges on the Daily level in the NY Crude Oil Futures, this market remains moderately bearish position at this time with the overhead resistance beginning at 7096 and support forming below at 7022. The market is trading closer to the support level at this time.
On the weekly level, the last important high was established the week of January 13th at 7939, which was up 8 weeks from the low made back during the week of November 18th. We have seen the market drop sharply for the past week penetrating the previous week's low and it closed lower. We are trading below the Weekly Momentum Indicators warning that the decline is very significant and we need to pay attention to the timing and reversals. When we look deeply into the underlying tone of this immediate market, we see it is cautiously starting to weaken since the previous high at 3070 made 1239 weeks . Immediately, this decline from the last high established the week of January 13th has been important, closing sharply lower as well. Before, this recent rally exceeded the previous high of 7288 made back during the week of November 4th. Nonetheless, that high was actually lower than the previous high made the week of October 7th suggesting this market has really been running out of sustainable buying for right now. This immediate decline has thus far held the previous low formed at 6653 made the week of November 18th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action. Looking at this from a wider perspective, this market has been trading up for the past 13 weeks which from a timing perspective warrants concern.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2021 while the last low formed on 2024. However, this market has declined in price with the last cyclical low formed on 2023 warning that this market remains weak at this time on a correlation perspective declining in both price and Momentum.
Interestingly, the NY Crude Oil Futures has been in a bullish phase for the past 4 months since the low established back in September 2024.
Some caution is necessary since the last high 7939 was important given we did obtain one sell signal from that event established during January. That high was still lower than the previous high established at 8767 back during April 2024. Nevertheless, at this time, the market is still weak trading beneath last month's low.
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3 days ago
Natural Gas Struggles at Resistance, Bearish Reversal in Sight
By: Bruce Powers | February 21, 2025
• Natural gas consolidates below resistance, forming a bearish shooting star. A break below $4.15 could confirm a pullback, with possible support near $3.98 and $3.75.
Natural gas continued to consolidate near trend highs on Friday. It is on track to end the day with an inside day. The high of the day at $4.44 retested resistance near the current trend high of $4.48 that was reached yesterday. However, the day will likely end with natural gas in a bearish position, lower for the day and with a closing price in the lower half of the day’s trading range.
Day Likely Ends Bearish
Although it is not surprising to see another attempt to go to new highs a subsequent intraday selloff puts natural gas at risk of ending the day with a bearish shooting star candlestick pattern. Even though it is a bearish pattern inside an inside day pattern, it shows sellers dominating. The shooting star is typically a stronger bearish indication if it occurs at the top of an uptrend. That would have been yesterday. Nonetheless, in this case the bearish one-day candle follows a bearish candle from Thursday.
Resistance Continues to Hold
Resistance has been seen around a logical price resistance zone marked by a top parallel rising trend channel line. A bullish breakout above the line and therefore the channel was last attempted on January 13, the prior trend high. That new high day also ended the day in a decisive bearish position. Even though there could be more upside before the current advance is complete, the combination of the channel line pattern and the bearish response indicate that the chance of a bearish pullback of some degree is more likely now.
Bearish Below $4.15
A bearish signal will be indicated on a drop below today’s low of $4.15. Yesterday’s low of $4.03 along with the 50% retracement of an internal uptrend at $4.02 is the next potential support area. However, there is confluence of two Fibonacci retracement levels at $3.98, which may make it a more likely target for a minimum pullback. Further down is a possible support zone from $3.75 to $3.73. The behavior around the internal thin uptrend line showing near-term dynamic support should also provide clues as to changes in support and demand. If a deeper pullback does occur, a minimum test of support around that trendline seems likely.
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3 days ago
Cold As Ice. The Energy Report
By: Phil Flynn | February 21, 2025
The global oil market seems to be frozen in time. The surge in demand due to cold weather in the United States is a contributing factor as the Energy Information Administration released a report that had icicles hanging from it. The oil market is attempting to balance the bearish factors associated with President Trump’s “drill baby drill” policy and the streamlining and removal of ridiculous regulations against the potential tightening of sanctions on Iran and Russia. Additionally, there is the possibility that OPEC+ will maintain its current production levels, refraining from adding any barrels to an already constrained oil market.
The Energy Information Administration (EIA) weekly status report showed the impact of the cold weather on the oil producing areas. The EIA showed that oil refinery inputs averaged just 15.4 million barrels per day, a decrease of 15,000 barrels per day from the previous week.
Refineries are operating at 84.9% of their capacity. While some refineries may be undergoing maintenance, the reduction in operations was also affected by the cold weather. The drop in refinery runs contributed to a 4.6-million-barrel increase in crude oil supplies, but distillate inventories fell by 2.1 million barrels which leaves supply 12% below the Five-Year average.
Cold weather has increased U.S. oil demand to 20.4 million barrels per day over the past four weeks, driven partly by higher distillate fuel demand. Distillate supplies are up 14.2% from a year ago. These factors are keeping oil in a range. Basically right now any trade that you can buy near 70 should be very good value. Currently $73 seems to be the major resistance and a close over $73 should send us up to 75 quite quickly.
On top of that we think the geopolitical risk is going to start to creep back up again. Reports that Iran is able to move more oil to China in recent days could cause a blowback by the Trump administration.
The despicable Hamas terrorist are adding to risk. Reports read, “Israeli military said Friday it had positively identified the remains of two young hostages but another body released by Hamas under a ceasefire deal was not the boys’ mother as the militant group had promised. The revelation was a shocking twist in the saga surrounding the Bibas family, who have become global symbols of the plight of Israeli hostages held by Hamas, and threw the future of the fragile ceasefire into question. “This is a violation of utmost severity by the Hamas terrorist organization,” the army said in a statement. During the monthlong ceasefire, Hamas has been releasing living hostages in exchange hundreds of Palestinian prisoners. Thursday’s release marked the first time the group has returned the remains of dead hostages.
Winter is not giving up, yet neither is the natural gas rally. Fox Weather reports that, “Friday brings the final day of the record-breaking arctic outbreak that has frozen the central U.S., but the danger isn’t over. While some areas are experiencing a slight reprieve from the extreme lows seen earlier in the week, subzero wind chills persist, stretching from the northern border down to the Gulf Coast. More than 80 locations are bracing for more likely record-low temperatures and sub-zero wind chills, with some facing their coldest late-season readings ever.
The EIA said that working gas in storage was 2,101 Bcf as of Friday, February 14, 2025, according to EIA estimates. This represents a net decrease of 196 Bcf from the previous week. Stocks were 386 Bcf less than last year at this time and 118 Bcf below the five-year average of 2,219 Bcf. At 2,101 Bcf, total working gas is within the five-year historical range. After the warm spell, some predict it will get cold again. This expectation is maintaining the demand for natural gas. It appears that the future of natural gas usage largely depends on weather conditions.
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4 days ago
Crude Oil Struggles at 50-Day MA, Downtrend Still Intact
By: Bruce Powers | February 20, 2025
• Resistance at the 50-Day MA halted crude oil’s rebound, keeping the downtrend intact unless prices break above $72.64, with downside risks toward $70.03.
Crude oil advanced to a new bounce high of $73.49 on Thursday, counter to the dominant near term decline. It was the second day in a row that resistance around the 50-Day MA (orange) was successfully tested as resistance was seen. The 50-Day line is at $73.30, and the 20-Day MA is at $72.83, currently.
However, since they are close to each together, the 50-Day line takes priority as it is calculated on a higher time frame. Crude is on track to close in a relatively weak position today within the day’s trading range, as it did yesterday as well. Those are signs of short-term weakness.
Potential for Lower Swing High
Today’s high has the potential to retain the downtrend price structure with a lower swing high. A drop below today’s low of $72.09 will establish a new lower swing high and retain the integrity of the downtrend that began from the $80.76 swing high. The downtrend remains in place unless there is a sustained rally above the February 11 interim swing high at $72.64.
However, if today’s high establishes a new lower swing high and it is subsequently broken to the upside, that could provide an early signal for a bullish change in trend. Nonetheless, a rally above today’s high prior to establishing a new lower swing high puts crude oil in a position to challenge the $72.64 swing high. Subsequently, if a $72.64 bull breakout triggers, the 200-Day MA at $74.49 becomes the next higher price target.
Next Lower Target at $70.52 if Decline Continues
Alternatively, the bearish correction continues to lower price targets, starting with the 78.6% retracement at $70.03. There is also a range of prior consolidation that represents potential support below the current retracement low at $70.52. Reaching the 78.6% retracement level could signal the completion of the decline. Notice that crude oil has been trading near trend lows recently and it has been showing signs of consolidation. In other words, bearish momentum has diminished.
Lower Level at $68.82
That could be the end of it but if not the $68.82 interim swing low marks a lower price target. A drop below Wednesday’s low of $72.07 shows weakness that could lead to lower prices if the breakdown is sustained. It may be easier to recognize on the weekly chart (not shown).
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4 days ago
Natural Gas Rally Stalls at New Trend High, Retracement Levels Eyed
By: Bruce Powers | February 20, 2025
• Resistance near $4.48 halted natural gas’s rally, prompting a retracement. Key support lies at $3.91, while a breakout above resistance could target higher levels.
Natural gas reached a new trend high of $4.48 on Thursday thereby testing potential resistance around a top trend channel line. The prior trend high was $4.37. Subsequently, resistance was seen from that high leading to an intraday pullback. Notice that there is also an earlier internal rising trendline that converges around the top trend channel line and is another indication that a key resistance level may have been met.
At the time of this writing natural gas is on track to end the day down and it may close in the lower half of the day’s trading range if not the lower third. The new trend high completed a $1.49 or 49.7% advance from the $2.99 swing low from late January.
50% Retracement of Small Upswing
Today’s bearish pullback following the $4.48 high has almost completed a 50% retracement of an internal upswing. The 50% level is at $4.02 and the low for the day so far was $4.03. Nonetheless, that is a price level measuring a shorter internal upswing while the first retracement level from the full advance is at $3.91. That price level is the convergence of both the 38.2% Fibonacci retracement of the full advance and the 61.8% retracement of the internal upswing. Therefore, baring a breakout to new highs before a pullback, that price level is the first lower target.
Lower Price Levels
Subsequently, the next lower confluence potential support zone is identified from $3.75 to $3.73. It consists of a 78.6% retracement level and a 50% retracement level, respectively. Nonetheless, both the 20-Day MA and 50-Day MAs were recently reclaimed during the recent rise. There has not yet been a test of support around those moving averages other than on one-day.
Therefore, if a deeper pullback occurs, they would be obvious potential targets. Keep in mind that the price levels represented are dynamic. Currently, the 50-Day line is at $3.62 and the 20-Day is at $2.57. Moreover, there is also a minor swing low (begins the internal upswing Fibonacci measurement) and 61.8% Fibonacci retracement at $3.56 and $3.55, respectively.
Bull Continuation Above $4.48
Since the top channel line was successfully tested as resistance today, it may also mark a point of potential resistance in the future. Nonetheless, a decisive breakout above today’s high has natural gas heading towards, $4.56, $4.70/$4.72, followed by a 38.2% Fibonacci retracement for the full downtrend that began from the 2022 high at $10.03.
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4 days ago
Crude Inventories Rise by 4.6 Million Barrels; WTI Oil Tests Session Highs
By: Vladimir Zernov | February 20, 2025
Key Points:
• Strategic Petroleum Reserve remained unchanged at 395.3 million barrels.
• Domestic oil production was mostly unchanged at 13.497 million bpd.
• Oil markets moved higher as traders reacted to the EIA report.
On February 20, 2025, EIA released its Weekly Petroleum Status Report. The report indicated that crude inventories increased by 4.6 million barrels from the previous week, compared to analyst consensus of +3 million barrels.
More information in our economic calendar
Gasoline inventories decreased by 0.2 million barrels, compared to analyst forecast of +0.7 million barrels. Distillate fuel inventories declined by 2.1 million barrels from the previous week.
U.S. crude oil imports declined by 488,000 bpd, averaging 5.8 million bpd. Over the past four weeks, crude oil imports averaged 6.4 million bpd.
Strategic Petroleum Reserve remained unchanged at 395.3 million as U.S. did not buy oil for strategic reserves.
Domestic oil production increased from 13,494 million bpd to 13,497 million bpd. From a big picture point of view, domestic oil production remains at high levels.
WTI oil gains ground as traders react to the EIA report. Currently, WTI oil is trying to settle above the $72.85 level. Falling gasoline inventories may provide additional support to oil markets.
Brent oil is moving towards the $77.00 level as traders focus on the EIA data. Traders will also focus on the recent disruption of oil supply from Kazakhstan, which continues to serve as a positive catalyst for Brent oil.
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4 days ago
100%. The Energy Report
By: Phil Flynn | February 20, 2025
Talk about shaking up the global energy world order! America is back 100%! President Trump just increased energy demand expectations after announcing that he would consider a tax cut that would include 100% expensing for new US factories. That tax cut, coupled with the fact that the United States has some of the lowest natural gas prices in the industrialized world, will create a situation where we should see a surge of investment into the United States with new high paying jobs.
The United States already has a huge home field advantage when it comes to natural gas prices with the lowest price hydro-carbon in the industrialized world and now with that 100% expensing will give more incentive for investors around the world to build their factories in America. That is only going to make good business sense along with the removal of ridiculous regulations and an anti-natural gas agenda by the previous administration. Biden era policies hindered investment in factories, and it’s caused many companies to invest their money elsewhere.
The revelations from the DOGE audits suggest that the lack of development may be attributed to government corruption, potentially involving politicians seeking personal gain. Gee, I wonder what the Big Guy has been up to lately.
Last week the Trump Administration approved a Texas port capable of shipping 1.0 million barrels of oil a day proposed by Sentinel Midstream LLC. Bloomberg News reported that, “The project, first proposed in 2019 and known as the Texas GulfLink Deepwater Port, had been awaiting a final authorization from the Transportation Department’s Maritime Administration. “That was held up for five years, and it was stonewalled,” Transportation Secretary Sean Duffy said Friday. “Bureaucrats got in the way, and now we are moving forward with that.” Duffy cast the port as important to “making sure we can move energy in and out of the country.”
Oil prices are holding their ground after a bearish API report but they’re still marked into a trading range. As Fox Weather reported, frigid cold temperatures are not only supporting natural gas but oil prices as well. Fox Weather reported that the arctic outbreak that has enveloped the central U.S. is hitting its peak Thursday as frigid temperatures continue to spread south and east across the nation. Extreme Cold Warnings and Cold Weather Advisories are posted for a vast swath of the country, stretching from Montana to Texas and eastward beyond the Mississippi River to northern Florida and parts of the Southeast. The sheer scale of the cold is staggering, with 230 million Americans experiencing temperatures below freezing. That is leading to production shutdowns because of the cold weather and is reducing flow.
At the same time Bloomberg is reporting that we’re seeing increased exports from both Russia and Iran as they seek ways to avoid sanctions. Iran’s grand poohbah Ali Khamenei is begging Qatar to ignore the United States and free up some of its frozen cash. Iran is bleeding cash with the Trump Administration’s tougher enforcement and is making it more difficult for Iran’s economy. It could collapse and it’s going to be interesting to see what happens. Will Trump keep the pressure on and so these exports from Iran to China could cause trouble for anyone who deals with it.
Fox News is reporting that, “Iranian Crown Prince Reza Pahlavi is calling for global action to defeat the Islamic Republic’s regime. Pahlavi says the regime is “weaker than it has ever been” and the people of Iran are ready to take back their “stolen country.” Pahlavi spoke at the Geneva Summit for Human Rights and Democracy on Tuesday, highlighting the plight of the Iranian people, calling the country a “nation in chains,” and the oppressive nature of the Islamic Republic regime headed by Ayatollah Ali Khamenei.
The Trump Administration freezes funds to Palestinian security forces according to the Washington Post. Raphael Bostic President and Chief Executive Officer of the Federal Reserve Bank of Atlanta spoke some truth when it came the false assumptions that tariffs cause inflation. Bostic said that, “While some policy proposals could add to inflation, others could boost productivity and lower price pressures.”
Bloomberg is reporting that, “European natural gas futures touched the lowest level in a month as US fuel exports extend a record-breaking run, helping to ease some supply worries. Benchmark contracts dropped as much as 4.7% to the price since mid-January, before hovering near €48 a megawatt- hour. Increased output of liquefied natural gas from the US — Europe’s top supplier of the super-chilled fuel — is the latest in a string of bearish factors that have helped to turn around this year’s rally.
Oil prices remain between 70 to 73, with a potential breakout to 75. Although the report’s expectations were disappointing, strong demand in the upcoming weeks suggests solid support. Consider buying breaks and possibly selling like option strategies. The API reported that API: Crude Oil +3.339 Cush +1.684 Gasoline +2.832 Dist -2.689.
Natural gas shorts got squeezed on cold temperatures. NYMEX natural gas futures a two-year 4.476 intraday.
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5 days ago
Natural Gas Extends Gains – Will the Uptrend Continue?
By: Bruce Powers | February 19, 2025
• Natural gas extended its rally after testing the 50-Day MA, gaining 44.6% in 12 days. Resistance at $4.37 is crucial for further upside.
National gas continued a sharp rally on Wednesday following a successful test of support at the 50-Day MA on Tuesday. Following a low of $3.55 and a test of support near the 50-Day line, the buyers took control and remained so into the close. Demand spiked again on Wednesday with natural gas continuing to trade near the highs of the day at the time of this writing. It looks like the initial pullback yesterday to test the 50-Day line created a slingshot type effect and two days of strong bullish momentum. Currently, the high for the day was $4.325, which is very close to the current high for the uptrend at $4.37.
Strong Bullish Momentum
Given the strong bullish momentum exhibited the past couple days and sustained buying throughout the day the current top is at risk of being tested as resistance with the possibility of a continuation breakout. If the advance can get above $4.37 there is a chance that the next higher target of $4.56 might be reached. There is also the possibility that the next higher target range, where there is the confluence of several indicators, could be reached.
Measured Moves Targets Higher
Nonetheless, before higher targets can be approached a sustained breakout above the $4.37 trend high needs to be successful. Certainly, the rally from the $2.99 swing low from late-January has made significant progress so far. As of today’s high, natural gas had advanced by as much as $1.33 or 44.6% in 12 days. However, the bull trend may be in its final stages before demand slows.
It is interesting to note that today’s advance stopped at a trendline that previously represented support. A successful test of the line as resistance looks to have completed today. Nonetheless, what happens next will be telling. Either resistance continues to be seen around the trendline or a breakout above it occurs.
History Shows Possibility of New Highs
A pattern emerges when examining six previous natural gas upswings (measured moves) since April 2024. For comparison, the percentage price change is considered. The largest gain was the first sharp rally off the April low. That measured move resulted in a 99.6% increase in the price of natural gas.
Otherwise, there were two measured moves showing close to a 61% advance, two showing about a 32% gain, and one around 41%. Since the current advance has exceeded that performance, it shows relative strength in the current rally. A 61% gain from the $2.99 low would complete at $4.81.
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5 days ago
Freeze Your Gas Off. The Energy Report
By: Phil Flynn | February 19, 2025
Natural gas and oil are moving higher on a deadly Arctic Blast that could drive demand to records while supplies get frozen in. According to Fox Weather and the FOX Forecast Center, the arctic air that has descended across the Lower 48 states could drive temperatures to 30-40 degrees below average for this time of year. They warn that this frigid pattern appears locked in for the foreseeable future, with a deep freeze potentially lasting through the end of the month, the FOX Forecast Center said. This wicked cold is already causing havoc for production.
The North Dakota Pipeline Authority said yesterday that oil production was estimated to be down between 120,000 and 150,000 barrels of oil per day, as of Tuesday morning, due to the recent extreme cold and related operations challenges. Associated wellhead natural gas production was also estimated to be down 0.34 to 0.42 billion cubic feet per day, according to Justin Kringstad, the director of the North Dakota Pipeline Authority.
The production issues may be a wrinkle for liquefied natural gas exports which did hit a new record high at the LNG facilities at the Sabine Pass, Cameron, Calcasieu Pass, Elba Island, Cove Point, Plaquemines, Freeport & Corpus Christi combined for Feb 17 was 15.48 Bcf. We will also be getting reports about freeze offs in Texas and throughout the Permian basin. But hopefully they’ll be able to keep the lights on.
Bloomberg News reported that, “The Electric Reliability Council of Texas, the state’s grid operator, said electricity demand will soar in the coming days but it expects to be able to meet the spike in consumption. Regulators and lawmakers have moved to bolster the state’s power system after the grid collapsed during a series of winter storms in 2021, killing hundreds of people as homes and businesses were left in the dark. Power demand on the Texas grid is expected to reach 79.5 gigawatts on Feb. 20 between 7 a.m. and 8 a.m., which would be 37% higher than this afternoon’s projected high, according to recent Ercot forecasts. If that outlook holds, it would topple the current winter record.
Oil is also getting support from the fact that OPEC is considering not adding oil back to the market. The International Energy Agency is pointing to the fact that supplies in the US have inexplicably risen the last couple of weeks and because of that they think that there’s going to be a little bit of supply overhang at about 140,000 barrels a day. Yet in reality the cold temperatures could wipe out any surplus that they see and because the numbers that we’ve seen the last couple of weeks are questionable to say the least. I wouldn’t put too much comfort in the supply overhang yet at the same time we’re seeing international news start to drive prices as well.
One cannot deny the fact that President Trump and his energy strategy and energy emergency is already putting downward pressure on prices. Hedge funds are pulling back from bullish positions not only because they’re concerned about tariffs and foreign policy but also because they believe that President Trump could open the door to a new era of lower energy prices with reduced regulation and common sense in energy strategies.
Also a reversal from the damage the Green Deal that caused significant damage not only to the global economy but to the stability of the globe. It also wasted trillions of dollars. TNND reported that Energy Secretary Chris Wright on Monday slammed efforts to achieve net zero carbon emissions by 2050 as “sinister.” Wright’s remarks came while speaking at the Alliance for Responsible Citizenship (ARC) forum in London. The three-day forum is described on ARC’s website as a gathering of “world-leading thinkers, business leaders, policy makers, and culture formers” to discuss questions pertaining to “social, economic, cultural, and moral” matters.
Wright addressed pushes to reach net zero emissions within the next 25 years. The U.S. Department of Energy defines a net-zero economy as averting or removing “as much greenhouse gas as it produces,” according to its website. The U.K. has emphasized its commitment to reaching such a status by 2050. Joe Biden in 2021 also set a goal for the U.S. government to reach net zero emissions by 2050. “Net zero 2050 is a sinister goal, it’s a terrible goal,” Wright said. “It’s both unachievable by any practical means, but the aggressive pursuit of it — and you’re sitting in a country that has aggressively pursued this goal — has not delivered any benefits, but it’s delivered tremendous costs.”
Weather forecasts can continue to drive this market. We continue to believe that oil is at the lower end of a trading range and it seems to have held that lower end. The upper end of the trading range could be as high as 73 to 75 but more than likely eventually we’re going to test 80. Neutral strategies on options might be very attractive in this type of environment but at the same time you can look for shorter term swing trades, which could be a good way to take advantage of this range trading.
Oil Price reported that he Ukrainian drone attack on a pumping station of a pipeline in southern Russia, which carries oil from Kazakhstan’s major oilfields, is a blow at U.S. companies, the oil market, and U.S. President Donald Trump, said Dmitry Medvedev, deputy chairman of the powerful Security Council of Russia. On Monday, the Caspian Pipeline Consortium (CPC), which operates the pipeline from the Caspian coast in northwest Kazakhstan to the Novorossiysk port on Russia’s Black Sea coast and carries most of Kazakh crude exports, said that one of its pumping stations was attacked by drones. After the attack, the Kropotkinskaya pumping station was taken out of service, and crude transportation through the Tengiz-Novorossiysk pipeline system is being maintained at reduced flow rates, bypassing the attacked pumping station, CPC said.
Natural gas is going to be very interesting. We will continue to watch the Fox Forecast Center for any changes. If we continue with these cold forecasts, the rally on natural gas may not be over with. If the market is convinced that we can see it warm up after this cold blast fairly quickly then perhaps we can ease some of the concerns. But make no mistake about it this Arctic blast has a lot of natural gas traders questioning their complacency about supply.
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6 days ago
Crude Oil Downtrend Intact Despite Short-Term Reversal
By: Bruce Powers | February 18, 2025
• Crude oil remains in a bearish retracement despite a short-term bounce. Key resistance levels near $73.15 may cap gains, while downside potential remains open.
Crude oil remains in a bearish retracement that may have further to fall. However, on Tuesday, it triggered a bullish reversal by surpassing Monday’s high of $70.52. The high for the day at the time of this writing was $71.27 and trading continues near the highs of the day. If the day ends with crude in the top third of the day’s trading range, there is a good chance it can test higher potential resistance levels. On Monday, a minor new retracement low of $70.52 was established.
Bearish Correction May Have More to Go
The price of crude oil dropped by $10.23, or 12.7%, from the January 15 high of $80.76. However, it remains in a downtrend with lower swing highs and lower swing lows. Moreover, last week ended at the lowest weekly closing price for crude in seven weeks. A bearish shooting star candlestick pattern formed for the week and the closing price of $70.95 was almost below the prior week’s low at $70.91. This indicates that downward pressure remains.
Moving Averages Point to Possible Resistance
Moving averages tell a story as the 20-Day MA (purple) is touching the 50-Day MA (orange) and is on track to possibly drop below it, which is a bearish sign. The expectation is for this bounce to eventually encounter resistance and the price of crude to turn back down.
Since the two moving averages are converging, they represent an idea price zone for a test of resistance. Currently, the 50-Day line shows $73.13, and the 20-Day line marks $73.15. Although there has been a healthy correction so far, previous measured moves keep open the possibility of crude testing lower potential support levels before the correction is complete.
Bearish Measured Moves
Two of the most recent bearish corrections are marked on the chart. The first in August 2024 ended with an 18.3% decline in the price of crude oil, while the next bearish correction that began in October completed a 15.5% decrease. There are two lower potential targets for crude oil indicated on the chart. The first is the completion of a 78.6% retracement at $70.03. A bit lower is the three-point rising trendline, that shows dynamic potential resistance price levels. Crude oil would be down by 13.3% from the January swing high at that point.
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6 days ago
Natural Gas Rally Extends, but Risk of Exhaustion Appear
By: Bruce Powers | February 18, 2025
• Natural gas surged to $4.01, nearing key resistance at $4.06. While bullish momentum remains strong, early signs of exhaustion suggest a potential pullback ahead.
Natural gas strengthened aggressively on Tuesday, reaching a new rally high of $4.01, at the time of this writing. Trading continues near the highs of the day and natural gas will likely end the day near the top of the trading range. This would put it in a position to likely test potential resistance around the 78.6% retracement level at $4.06.
There is the potential for natural gas to end the day with the third highest daily closing price within the current uptrend. That would be a bullish sign and increases the chance that natural gas has completed a bearish correction.
Strong Advance Indicated
Further signs of strength could lead to continued bullish behavior within the next pullback or consolidation. The recent advance has continued to show signs of strength as it advanced, with the more significant being the reclaim of both the 20-Day and 50-Day MAs.
It is interesting to note that earlier in today’s trading session natural gas began the trading session by gapping down and then falling to successfully test support around the 50-Day MA with the day’s low of $3.55. That initial decline provided bearish signals on a drop below the lows of each of the past two days. The market clearly recognized the 50-Day MA price area as the buyers clearly took back control.
Weekly Breakout
There are also a couple signs of strength to be aware of on the weekly chart (not shown). The three-week high at $3.83 was exceeded today, as well as the 200-Week MA, which is at $3.91. Today’s closing price should be above each of those price levels and will therefore confirm the strength of the breakouts.
Given Strength, Pullback Maybe Short
Despite strong bullish indications a pullback could come following a test of the 78.6% retracement, as noted above. There is also a former weekly high at $4.05. It provides a little more attention to that price area. Even if the $4.06 price level is exceeded to the upside the current advance is getting extended.
As of today’s high, natural gas was up by $1.02 or 34.2% from the recent $2.99 swing low. Certainly, it can go higher, but today’s spike is not happening at the beginning of the rally and therefore there might be early signs of exhaustion that has not yet been fully registered by the market.
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6 days ago
Crude Oil Continues to See Buyers on Dips
By: Christopher Lewis | February 18, 2025
• The crude oil markets that I follow here at FX Empire are all suggesting that there is a significant amount of pressure underneath, as the markets may have fund a bit of a bottom for the time being.
WTI Crude Oil Technical Analysis
Crude oil markets have been all over the place in the early hours of Tuesday as we continue to see a lot of volatility. The $72.50 level above is a significant barrier that we will have to pay attention to, not only due to the recent noise in that area, but also the 50 day EMA hanging about. So with that, I think you’ve got a situation where if we can break above that 50 day EMA, then we will go challenging the 200 day EMA.
I don’t know if it is going to be easy to get a grip on this market in the short term, because there are so many different things going on at the same time. That being said, I also recognize that traders will continue to see this through the prism of a market that has to worry about tariffs and global trade in general. So, I expect volatility, but I do prefer buying short-term dips.
Brent Crude Oil Technical Analysis
Brent market is very much the same as the 50-day EMA has offered resistance right along with the $75.50 level. This area in general I think is worth paying attention to and if we can break higher, then the 200-day EMA gets targeted at the $77.38 level. Short-term pullbacks continue to be supported by the $74 level, and I think that will probably end up being the case overall.
Ultimately, this is a market that has been noisy, but I also think it is a market that will continue to be one that eventually breaks out to the upside, especially as we start to head into the higher demand season that generally starts sometime in spring.
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6 days ago
Stable Instability. The Energy Report
By: Phil Flynn | February 18, 2025
Oil prices under the Presidency of Donald J. Trump have entered a new world of stable instability. What I mean is that oil and global stock and bond markets are holding up magnificently well despite the fear mongering and outright unstable comments regarding Trump, Tariffs and DOGE ( Department of Government Efficiency).
Oil prices remain stable as worries about tariffs impacting demand and raising prices are balanced by significant government spending cuts. The oil market is also realizing that tariffs are not inflationary. They may cause some prices to rise but fall in other places. Cutting government waste and money printing is the cure for inflation and the markets must love that, despite the wailing and gnashing of teeth by those on the receiving end of this government money. The growing sense of stable energy prices driven by sensible energy policy could usher in a new era of energy price stability that will benefit both consumers and producers.
Today oil prices are supported by reports that OPEC may delay its production increase due to a weak global market. OPEC continues to point to weak demand from China as the reason but a cut when global oil inventories continue to fall is a dangerous game and should get some blowback from President Donald Trump.
Bloomberg reported that, “OPEC+ is considering pushing back a series of monthly supply increases due to begin in April despite calls from US President Donald Trump to lower prices, delegates said.” Then Reuters reported that, “OPEC+ producers are not considering delaying a series of monthly oil supply increases that is scheduled to begin in April, Russian Deputy Prime Minister Alexander Novak said on Monday, Russia’s RIA state news agency reported.”
See what I mean? Stable Instability. I present for your consideration, “Oil up on Bloomberg report. Oil down on Reuters report, oil back up on growing demand.
Trump talking peace with Russia is causing a sell-off for natural gas in Europe as hopes are being raised that a peace deal would allow the resumption of natural gas exports from Russia lowering the record breaking prices the Europeans have been suffering with.
According to IFAX at the Russia US talks were “productive” according to the Kremlin sources. They report that there were serious discussions on all issues and there are conditions for their meetings to take place, but a Putin-Trump meeting is not likely next week.
This occurs as the US continues to increase its position in the global energy market. Last week, U.S. Secretary of Energy Chris Wright joined President Trump to announce a new export authorization for the Commonwealth LNG project proposed for Cameron Parish, Louisiana. “Today’s action is the first major U.S. liquefied natural gas (LNG) project to receive an export authorization for non-free trade agreement (FTA) countries since President Trump and the Department of Energy lifted the Biden-Harris administration’s damaging freeze on LNG export permit approvals, restoring American energy leadership.” US energy secretary Chris Wright also hinted that more LNG approvals will be coming shortly that can help provide much needed liquified natural gas to the rest of the world and to Europe.
The Peoples Rebublic of California is considering a plan like one adopted by Venezuela, where the government would take control of the refining sector. After years of imposing regulations that affected the operations of California refiners, there is concern that these policies may lead to significantly higher gasoline prices in California compared to the rest of the country. The comparison to Hugo Chavez’s approach in Venezuela raises questions about the potential outcomes of this move.
Currently, petroleum prices have remained stable. This could be an opportunity to consider various swing trades for oil, gasoline, and diesel. Seasonal spreads are also appearing favorable. Additionally, there may be options available by collecting premiums and coverage with spreads.
President Trump also has directed Interior Secretary Doug Burgum to undo Biden’s ban on future offshore oil drilling on the East and West coasts. Biden’s last-minute action last month “viciously took out” more than 625 million acres offshore that could contribute to the nation’s “net worth,” Trump said.
The latest forecast from the Fox Weather Channel predicts a severe winter storm that could bring heavy snow from the Plains to North Carolina. Fox Weather also reported that the polar vortex has returned to the US and frostbite inducing temperatures are blasting millions of Americans.
Natural gas prices have increased based on these forecasts and are currently stabilizing. Meanwhile, US natural gas producers have managed to raise production in recent weeks, compensating for some of the anticipated lost production due to freeze-offs.
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7 days ago
Natural Gas Pulls Back After Rally, Eyes Key Support Levels
By: Bruce Powers | February 17, 2025
• After reaching $3.80, natural gas pulled back, testing the 50-Day MA. The market remains bullish, but further retracement toward key support is possible.
Natural gas pulled back on Monday from a rally high of $3.80 that was reached on Friday. During the recent advance natural gas showed strength by reclaiming both the 50-Day and 20-Day MAs and closing above each. Resistance at last week’s high was a little shy of the 61.8% Fibonacci retracement level, which is $3.83.
There is also a prior weekly high at $3.83 that further confirms the potential resistance zone. The question now is whether strength will be retained within a relatively minor pullback or consolidation, or whether a bearish correction will be deeper, before the bull trend may be ready to continue.
Moving Averages Provide Key Near-term Price Levels
Today’s pullback found support at a low of $3.55. That was a successful test of support around the 50-Day MA, currently at $3.57. A little lower is a range from $3.51 to $4.49, which combines the 20-Day MA at $3.51 and the 38.2% Fibonacci retracement level at $4.49. It provides the first more significant support level and is the minimum expected retracement from Fibonacci analysis.
That would be the first price zone where the possibility of a bullish reversal improves. Although it is only one day, the fact that support was seen around the 50-Day line is a bullish sign and it shows the market recognizing the level.
Deeper Pullback Likely if Moving Averages Fail
Nonetheless, a deeper pullback to test the lower support level would not be a surprise. The rally from the $2.99 low in December showed underlying strength as natural gas had gained $0.81 or 27.0% as of last week’s high. Strength was retained through much of the advance as evidenced by only one relatively minor pullback represented by a lower daily low. And the bigger picture in natural gas remains bullish as the uptrend price structure has not been violated.
The near-term uptrend adjusted the angle of ascent to align with the uptrend line that starts from the swing low from August 2024. Notice that the line was confirmed as support with the recent swing low of $2.99. That swing low provided a third touch of the trendline. Clearly, support was seen from that low as it led to a bullish reversal and rally.
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1 week ago
WTI Crude Oil CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | February 16, 2025
• Following futures positions of non-commercials are as of February 11, 2025.
WTI crude oil: Currently net long 201.2k, down 14.3k.
West Texas Intermediate crude for months has been rangebound between $71-$72 and $81-$82 before dropping out of the bottom last September. The range was recaptured as soon as this year began, but sellers showed up mid-January at $79.39.
Last week, it closed at $71. Oil bulls began this week by rallying hard, ticking $73.68 by intraday Tuesday and reclaiming the 50-day. The average ($72.16), however, was lost in the very next session, with the crude remaining under pressure the remaining two sessions, finishing the week at $70.71/barrel, down 0.4 percent for the week.
This was the fifth consecutive weekly drop. Five weeks ago, WTI reversed lower after tagging $79.39 in a shooting star week. The weekly has room to continue lower. In this scenario, even if $71-$72 is breached, bulls can defend a rising trendline from last September’s low and regroup around $68.50.
In the meantime, US crude production in the week to February 7 increased 16,000 barrels per day week-over-week to 13.494 million b/d; output has come under slight pressure since registering a record 13.631 mb/d in the week to December 6. Crude imports dropped 606,000 b/d to 6.3 mb/d. As did gasoline inventory which declined three million barrels to 248.1 million barrels. Crude and distillate stocks, however, increased – up 4.1 million barrels and 135,000 barrels respectively to 427.9 million barrels and 118.6 million barrels. Refinery utilization rose five-tenths of a percentage point to 85 percent.
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1 week ago
Crude Oil Tests Key Support Zone as Demand Uncertainty Looms
By: James Hyerczyk | February 15, 2025
Key Points:
• Oil prices face volatility as supply risks battle rising U.S. stockpiles—will demand recovery prevent a deeper decline?
• Russian and Iranian supply cuts drive early gains, but bearish pressure builds from U.S. crude stockpiles and a hawkish Fed.
• Ukraine peace talks spark fears of lifted Russian sanctions, which could flood the market with additional crude supply.
• JPMorgan reports global oil demand rising to 103.4M bpd, yet economic concerns and Fed policy could cap further price gains.
• WTI crude tests key support at $70.80; a sustained break below $69.55 could push prices toward $64.78 in the near term.
Oil Prices Face Volatility as Supply and Demand Forces Collide
Crude oil markets saw significant swings last week, driven by supply concerns, geopolitical developments, and shifting demand expectations. While early gains were fueled by tightening Russian and Iranian exports, the latter half of the week brought bearish pressure from rising U.S. crude stockpiles, hawkish Federal Reserve policy, and potential breakthroughs in Ukraine peace talks. Traders are now assessing whether demand recovery can offset the growing downside risks.
Last week, Light Crude Oil Futures settled at $70.74, down $0.26 or -0.37%.
Supply Constraints Initially Support Prices
Early in the week, oil prices found bullish momentum as supply-side risks emerged. Russian crude production slipped below its OPEC+ quota, falling to 8.962 million barrels per day, while U.S. sanctions on Russian oil shipments created logistical bottlenecks. Iran also faced increasing export restrictions due to new U.S. sanctions, reinforcing expectations of tighter global supply.
These disruptions, combined with technical strength, encouraged traders to push crude prices higher. With WTI climbing above key moving averages, momentum suggested a possible test of $74.94 per barrel—a level that had previously acted as resistance. However, optimism faded as demand concerns took center stage later in the week.
Rising U.S. Inventories and Hawkish Fed Weigh on Oil Prices
Bearish sentiment intensified midweek as U.S. crude inventories surged. The American Petroleum Institute (API) reported a massive 9.4-million-barrel stockpile build, raising fears of oversupply. While gasoline and distillate inventories declined, the crude build signaled weakening refinery demand. Traders awaited official data from the Energy Information Administration (EIA) for confirmation, but the initial numbers dampened price support.
Adding to the pressure, Federal Reserve Chair Jerome Powell maintained a cautious economic outlook, signaling that rate cuts were unlikely in the near term. Higher borrowing costs typically slow economic activity, reducing industrial and consumer fuel consumption. Market participants also kept a close eye on inflation data, which could influence the Fed’s policy stance moving forward.
Ukraine Peace Talks Spark Fears of Increased Supply
A potential peace deal between Russia and Ukraine emerged as another headwind for crude markets. Reports suggested that both Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy expressed interest in negotiations, with former U.S. President Donald Trump playing a role in initiating talks. If a resolution is reached, sanctions on Russian crude could be lifted, adding barrels back to the global market.
The prospect of easing restrictions pressured Brent and WTI prices lower, with traders speculating that a diplomatic breakthrough could flood the market with additional supply. Meanwhile, the International Energy Agency (IEA) indicated that Russia might sustain its export levels through alternative trade routes, further weighing on sentiment.
Demand Recovery Offers Limited Support
Despite bearish developments, some factors provided near-term support. Oil demand showed signs of resilience, with JPMorgan analysts reporting that global consumption climbed to 103.4 million barrels per day, up by 1.4 million barrels from the prior year. A stronger-than-expected pickup in mobility and heating fuel demand in February also helped counterbalance supply concerns.
Additionally, easing trade war fears provided a modest lift to risk sentiment. The Biden administration delayed implementing new reciprocal tariffs, calming fears of a global trade slowdown. However, uncertainty remains as further tariff recommendations are expected by April 1, potentially impacting crude demand.
Market Outlook: Bearish Bias Unless Demand Strengthens
Daily Light Crude Oil Futures
Oil prices remain under pressure as rising U.S. crude inventories, a hawkish Fed, and potential geopolitical resolutions increase supply-side risks. While demand recovery offers some support, traders will be watching key technical levels closely. These key levels at $70.80 and $69.55 from a support zone. Trader reaction to this zone will set the tone for the week.
Look for a slightly bullish bias to develop on a sustained move over $70.80. Meanwhile, a sustained break under $69.55 puts the market in an even weaker position with $64.78 on the radar.
Unless fresh bullish catalysts emerge—such as stronger-than-expected economic data or new supply disruptions—the market is likely to remain defensive. Traders should monitor developments in Ukraine, Fed policy signals, and refinery demand trends for further direction.
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1 week ago
NY Crude Oil Futures (CL) »» Weekly Summary Analysis
By: Marty Armstrong | February 15, 2025
The NY Crude Oil Futures closing today at 7074 is immediately trading down about 1.36% for the year from last year's settlement of 7172. Caution is required for this market is starting to suggest it may now decline on the MONTHLY level. Up to this moment in time, this market has been rising for 4 months going into February suggesting that this has been a bull market trend on the monthly time level. As we stand right now, this market has made a new low breaking beneath the previous month's low reaching thus far 7022 while it's even trading beneath last month's low of 7179.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Crude Oil Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2020 and 2009 and 2001 and 1998 and 1994. The Last turning point on the ECM cycle high to line up with this market was 2022 and 2018 and 2011 and 2000.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The historical broader tone of the NY Crude Oil Futures has been a bearish consolidation following the high established back in 2008. Since then, this market has created 2 reaction highs which have been unable to break this overall protracted bearish consolidating trend. Still, the major low was made in 2023 and the market has bounced back for the last 2 years. The last Yearly Reversal to be elected was a Bullish at the close of 2023.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Looking at the indicating ranges on the Daily level in the NY Crude Oil Futures, this market remains moderately bearish position at this time with the overhead resistance beginning at 7185 and support forming below at 7043. The market is trading closer to the support level at this time.
On the weekly level, the last important high was established the week of January 13th at 7939, which was up 8 weeks from the low made back during the week of November 18th. We have seen the market drop sharply for the past week penetrating the previous week's low and it closed lower. We are trading below the Weekly Momentum Indicators warning that the decline is very significant and we need to pay attention to the timing and reversals. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 7939 made 4 weeks ago. Still, this market is within our trading envelope which spans between 5800 and 8580. Immediately, this decline from the last high established the week of January 13th has been important, closing sharply lower as well. Before, this recent rally exceeded the previous high of 7288 made back during the week of November 4th. Nonetheless, that high was actually lower than the previous high made the week of October 7th suggesting this market has really been running out of sustainable buying for right now. This immediate decline has thus far held the previous low formed at 6653 made the week of November 18th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action as well as trend, long-term trend, and cyclical strength. Looking at this from a wider perspective, this market has been trading up for the past 12 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2021 while the last low formed on 2024. However, this market has declined in price with the last cyclical low formed on 2023 warning that this market remains weak at this time on a correlation perspective declining in both price and Momentum.
Interestingly, the NY Crude Oil Futures has been in a bullish phase for the past 4 months since the low established back in September 2024.
Some caution is necessary since the last high 7939 was important given we did obtain one sell signal from that event established during January. That high was still lower than the previous high established at 8767 back during April 2024. Nevertheless, at this time, the market is still weak trading beneath last month's low.
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1 week ago
Natural Gas Tests Resistance – Will the Rally Continue?
By: Bruce Powers | February 14, 2025
• Natural gas maintains strength near recent highs. Resistance at $3.83 and support around $3.53–$3.56 could dictate the next move in the ongoing uptrend.
Natural gas reached a new near-term trend high of $3.80 on Friday before pulling back slightly. That high put it closer to the next identified resistance zone that looks to be around $3.83. That price level includes the completion of the 61.8% Fibonacci retracement, and it is also a weekly high from two weeks ago. It looks likely that this week will end with natural gas in a relatively strong position, in the top third of the week’s trading range.
Whether bullish momentum can be sustained into the next week, leading to a breakout above $3.80, remains to be seen. Alternatively, a pullback and consolidation within the weekly range from two weeks ago could also play out.
Further Weakness Likely Below $3.64
Further weakness towards lower potential support levels may follow a drop below today’s low of $3.64. Potential support around the 20-Day and 50-Day MA, currently from $3.53 to $3.56 will likely be tested. Notice that the 20-Day line crossed below the 50-Day line today. That relationship should continue to provide clues going forward. Natural gas completed a $1.38 or 31.6% bearish correction at the $2.99 low two weeks ago. Given the subsequent $0.81 or 27% advance, as of today’s high, it wouldn’t be surprising to see a rest before it may be ready to proceed higher.
Lower Support
Other price levels to watch for support include the prior interim swing high at $3.39 from early January and this week’s low at $3.35. The $3.39 price level is confirmed by the 50% retracement of the recent advance, which is $3.40. Further down is the 61.8% Fibonacci retracement at $3.03. The $3.30 price level is also the two-week low. Notice that in both cases, there are two indicators pointing to the same of similar price area.
Long-term Bull Trend Remains Intact
In the bigger picture, long-term bullish signals triggered the last quarter of 2024. There was the breakout of a large symmetrical triangle pattern and a bullish reversal of the long-term downtrend. The expectation is for the bull trend starting from the low of $1.52 to eventually continue once the correction is complete.
Notice that the recent swing low that followed the $4.37, an almost two-year high, successfully found support around the initial bull breakout area of $3.02. The subsequent bullish reaction indicates the low was likely significant and it established a higher swing high for the price structure of the uptrend.
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1 week ago
Feeling The Love! The Energy Report
By: Phil Flynn | February 14, 2025
Commodity prices are feeling the love this St Valentines day morning on hopes that tariffs delayed could be tariffs denied. Oh sure, that doesn’t mean that your St Valentines Day will be cheap with record breaking chocolate prices and beef prices, love is a bit expensive this year but maybe you could offset that in the wonderfully volatile commodity trade.
Oil prices are fixated on President Trump as he is rewriting the history books on a daily basis with bold leadership on the economy and war and peace.
Get ready for maximum pressure on Iran.
Oil prices popped this morning after U.S. Treasury secretary Scott Bessent said that we can: “ We can apply maximum economic pressure on Iran and that “ We’re committed to cut Iran oil exports to 100k barrels/day.
Yesterday oil prices which sold off early on the potential end to the Russian Ukraine conflict and on news that President Trump was going to announce reciprocal tariffs on the EU and South Korea and Japan.
Yet after it was reported that they would not go into effect in many cases until April oil came rallying back. There’s going to be a lot of time to negotiate before the tariffs are put in place.
This came as President Trump got a win some tariffs as Europe was shammed into reducing their tariffs on some US goods to 2%.
Bloomberg on trade wrote that “The president on Thursday signed a measure directing the US Trade Representative and Commerce secretary to propose new levies on a country-by-country basis in an effort to rebalance trade relations — a sweeping process that could take weeks or months to complete. Howard Lutnick, Trump’s nominee to lead the Commerce Department, told reporters all studies should be complete by April 1 and that Trump could act immediately afterward.
Still , The European Commission showed indignation and said that it “views President Trump’s proposed “reciprocal” trade policy as a step in the wrong direction.
The EU said that the remains committed to an open and predictable global trading system that benefits all partners.
They said that “The EU maintains some of the lowest tariffs in the world and sees no justification for increased US tariffs on its exports. Tariffs are taxes. By imposing tariffs, the US is taxing its own citizens, raising costs for business, stifling growth and fueling inflation. Tariffs heighten economic uncertainty and disrupt the efficiency and integration of global markets. . . .
And at the same time the Trump administration is starting to focus on the fact that they spend an awful lot of money as to our US taxpayers to protect Europe in NATO.
Reuters report that “The credit ratings of Europe’s NATO members are likely to suffer if they ramp up defense spending in line with U.S. President Donald Trump’s demands although they might drive the region to jointly issue debt, ratings firm S&P Global has said. Despite almost doubling their defense expenditure since Russia annexed Ukraine’s Crimea in 2014, European nations on average still spend below NATO’s 2% of GDP guidelines, while the U.S. finances nearly two-thirds of NATO’s military budget.”
Oil traders had a risk premium in oil just in case the conflict between Russia and Ukraine ended up being World War III. Oil traders could see that the Biden Administration and players in the EU had no plan to end the war and, in some ways, seemed to encourage it.
President Trump who says that the war would have never started if he were President and based on his track record in the White House, that is probably true has a plan, and it is moving forward
. Oil had sold off on news of the
Reuters is reporting today that President Donald Trump said on Thursday that Ukraine would be involved in peace talks with Russia, although Kyiv said it would be premature to speak with Moscow at a security conference on Friday.
Trump, speaking to reporters at the White House, said Ukraine would have a seat at the table during any peace negotiations with Russia over ending the war. “They’re part of it. We would have Ukraine, and we have Russia, and we’ll have other people involved, a lot of people,” Trump said.
Yet the odds of this war continuing and potentially dragging in the rest of Europe has been reduced and that is not lost on the oil trade.
Behind all these actions at the end of the day we have to continue to remember that with oil supplies there’s still tightening according to the International Energy industry oil supplies in the OECD countries continue to fall they fell by a whopping 26.1 million barrels to two 737.2 million barrels that is 91.1 million barrels below their five year average preliminary data also shows that inventories could fall even further to 49.3 million barrels in January yes supplies in China fell dramatically.
Natural gas surged to the upper Bollinger band and pulled back after more winter weather reports are shaking up the market in fact, we might not see spring until March or even April which is causing a dramatic shift in the natural gas world and an end to the supply glut.
The EIA reported a bullish decrease of 100 Bcf from the previous week. Stocks were 248 Bcf less than last year at this time and 67 Bcf below the five-year average of 2,364 Bcf. At 2,297 Bcf, total working gas is within the five-year historical range. This is after the EIA had to raise its price forecast for 2025 and 2026, because or winter. Tuesday the E IA said the natural gas price at the U.S. benchmark Henry Hub is expected to average $3.80 per million British thermal units in 2025 — up about 21 percent from its last forecast. EIA also raised its estimate for 2026, putting the annual average price at $4.20 per million Btus, compared with $4 in its January report. The Henry Hub spot price averaged $4.13 in January, EIA said, up from $3.01 in December.
Fox Weather channel models also suggest colder to come. Also reports that European gas storage fell below the five year average standing at 47% full or 49 billion cubic meters. Keep in mind that you experience president James is currently speaking in the United.
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2 weeks ago
Crude Oil Bounces After Hitting New Correction Low of $70.59
By: Bruce Powers | February 13, 2025
• Crude oil rebounded after hitting $70.59, but its bearish trend remains intact, with key resistance at $71.73 and further downside risk if support levels break.
Crude oil continued its bearish correction on Thursday, reaching a new retracement low of $70.59 and then bouncing intraday. At the time of this writing, crude oil continues to trade near the highs of the day, putting it on track to complete a bullish hammer candlestick pattern today. It should close in the top third of the day’s range, above $71.02, to retain strength. Subsequently, a decisive breakout above today’s high, at $71.73 currently, shows strength and could lead to a higher bounce.
Short Term Trend Remains Down
Keep in mind that the short-term pattern in crude, since the January swing high, is a declining trend. A rise above today’s high would signal a countertrend advance with crude rising into multiple potential resistance levels. Moreover, the decline today put the price of crude oil back below the 50-Day MA after a test of resistance around the 20-Day MA earlier this week. This suggests that the retracement low might not have been reached yet.
12.6% Bearish Correction Completed
Today’s low completed a $10.17 or 12.6% bearish correction from the most recent swing high in January. Therefore, this downswing is a match on a percentage basis with the largest downswings seen since September of last year. The value of crude oil previously decreased by 12.6% from the October 8 swing high, the largest downswing since September.
What this indicates is that the low for the retracement may have been reached, and if not, it should do so if the 78.6% retracement at $70.03 is tested as support. A little below that level is a minor swing low at $68.82, along with a short rising trendline across the bottom of recent price action.
Lower Support Points to $70.03
This is not to say that crude oil couldn’t fall lower. Certainly, the trendline could be broken and lower price levels tested. There are larger downswings that occurred following the April 2024 peak and crude would be closer to matching those larger drops if the 78.6% level or trendline support is reached. The largest decline since then was around 18%.
It is also interesting to note that the drop today triggered a bearish continuation on the weekly chart as last week’s low of $70.91 failed to hold as support. Moreover, the decline today put crude oil back below its 20-Week MA after rallying back above it earlier in the week. The 20-Week line is at a price of $72.14 currently.
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2 weeks ago
Natural Gas Rally Stalls After New Highs, Short-Term Pullback Likely
By: Bruce Powers | February 13, 2025
• Natural gas extended its rally to $3.79 but faced resistance, forming a bearish pattern that suggests a short-term pullback before resuming its longer-term bullish trend.
Natural gas continued its advance on Thursday, reaching a new high of $3.79 for the nine-day uptrend. Thursday’s rise reclaimed the 20-Day MA and further reclaimed the 50-Day MA, a sign of continued strength. Also, the next higher identified potential resistance zone was exceeded with a rise above the top of the range at $3.69.
Following the day’s high, natural gas dropped back towards the low of the day at $3.58. At the time of this writing, it continues to trade tired, in the lower third (below $3.72) of the day’s trading range. If the session ends with natural gas in a similar position, the day will end with a bearish shooting star candlestick pattern. It shows the bulls reaching exhaustion intraday, leaving the sellers to take control.
Signs of Strength Continue
So, there were bullish indications that reflected strength in demand, but at the same time, in the short term the rally looks extended, particularly, given the bearish reaction following the new rally high. Even if part of the day’s range is recovered, the damage has been done. Further upside may be limited in the short term and a pullback or consolidation could be next on the agenda. Nonetheless, if natural gas retains strength and it exceeds today’s high before a pullback, the next higher target zone is identified at around $3.83.
Big Picture Bullish
Keep in mind that the outlook in the bigger picture remains bullish for natural gas and there will likely be an eventual continuation of the bull trend with a rise above $4.37. A bullish daily pattern is supported by patterns on the higher time frame weekly and monthly charts. The weekly chart triggered a bullish breakout of an inside week this week and a weekly closing tomorrow above last week’s high of $3.44 will confirm the bullish signal. The monthly pattern shows February trading inside the price range from December.
Barrier at Prior Weekly High
It is important to note that the high from two weeks ago at $3.83 was almost tested as resistance today and it was followed by a decline. This would seem to indicate that the two-week high may not be further tested this week. Also, note that $3.83 also marks the next higher resistance zone identified by a couple Fibonacci levels. The weekly high gives that zone greater significance as a breakout above it will trigger a weekly bullish signal.
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2 weeks ago
The Energy Report
By: Phil Flynn | February 13, 2025
President Trump is making good on his promises to lower oil prices even if it isn’t in the conventional way. Oil prices are plummeting after Hamas caved and could confirmed its commitment to continue implementing the ceasefire deal agreed to. Hamas is saying that the hostages will be released according to schedule. President Trump also mentioned a good possibility of ending the war in Ukraine. He is in discussions with both Putin and Zelensky, suggesting a potential path to peace and an end to violence.
President Trump is single handedly removing the risk premium in oil and it’s probably a good thing because if you look around the world key oil inventories are at their lowest level in two years. Total inventories of crude oil and refined products in commercial storage across the OECD were estimated at 2,737 million barrels at the end of January 2025. OECD inventories were the lowest for the time of year since 2022 and before that 2015, according to data from the U.S. Energy Information Administration. OECD inventories were 136 million barrels (-5% or -1.01 standard deviations) below the prior ten-year seasonal average.
Kemp Energy reported that, “Petroleum inventories in the advanced economies have depleted to the lowest level since 2022, after Saudi Arabia and its OPEC partners postponed planned production increases and U.S. shale growth decelerated. Diminishing inventories have put a floor under spot crude prices and pushed the futures market into a steep backwardation, attracting increased interest from hedge funds and other investors in the last five months. Since the end of January, however, the escalating tariff conflict between the United States and its major trading partners has sowed uncertainty about the economic outlook, capping further price rises.
Tariff and trade wars are expected to have a negative impact on industrial activity and boost inflation in the short term, both of which are likely to have negative consequences for oil use. Falling inventories have pushed crude futures into an increasingly steep backwardation as traders anticipate more limited crude availability. Brent’s six-month calendar spread traded in an average backwardation of nearly $4 per barrel (87th percentile for all months since 2010) in January up from an average of less than $1.50 (46th percentile) in September.
Hedge funds and other money managers responded to depleting inventories by purchasing futures and options on Brent equivalent to 320 million barrels between the middle of September and the end of January.
By January 28, fund managers held a net long position equivalent to 308 million barrels (77th percentile for all weeks since 2011) up from a net short of 13 million on September 10 (the lowest position on record).
Kemp reports that spot prices and spreads would likely have risen even more sharply but for the escalating tariff conflict between the United States and its major trading partners which is likely to disrupt supply chains and prolong inflation. The prospect of a renewed downturn in global manufacturing, persistent price increases and interest rates remaining higher for longer has unnerved investors. Bullish optimism about a strong cyclical recovery in the major economies boosting oil consumption has given way to more caution. But that bullishness is now tempered by uncertainty about the impact of proliferating tariffs and the ability to avoid an unplanned escalation of the trade conflict.
Not to mention the prospects of peace. President Trump’s leadership on the world stage is single handedly reducing risk premium in the futures markets. Oil prices are not selling off because they’re worried about an economic slowdown. They are selling off in part because the economy is too strong but really because the United States is showing real leadership. The odds of a World War that was that was at the highest level at least since the Cuban missile crisis under President Biden has been reduced dramatically.
Fox Weather predicted it and it’s happening. Winter is back and that is causing another major spike up in natural gas prices. Fox Weather reported that a powerful and deadly winter storm that slammed the Plains and Midwest on Wednesday has pushed into the Northeast and New England, where it’s dumping a wintry mess of snow, sleet, freezing rain and rain that will lead to slow travel on area roads and highways Thursday morning.
Anthony Harrup at wsj.com reported that natural gas inventories probably decreased by less than average last week as a milder start to February curbed demand, particularly for heating in the residential and commercial sectors, while production picked up after January freeze-offs. Gas in underground storage is expected to have fallen by 96 billion cubic feet to 2,301 Bcf in the week ended Feb. 7, according to the average estimate of 11 analysts, brokers and traders surveyed by The Wall Street Journal. Forecasts range from a withdrawal of 82 Bcf to a withdrawal of 118 Bcf.
The U.S. Energy Information Administration is scheduled to report weekly natural gas inventories on Thursday at 10:30 a.m. EST. The predicted draw is smaller than the five-year average for the week of 144 Bcf and would reduce the deficit against the 2020-2024 average to 63 Bcf from 111 Bcf the week before. A return of below-normal temperatures across much of the U.S. this week and next are expected to widen the deficit in subsequent weeks.
Last week’s expected drawdown would leave natural gas stocks 244 Bcf below their level a year ago, when an exceptionally mild winter kept a lid on demand. Download the fox weather app to keep up with the latest on this winter weather that is driving natural gas prices.
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2 weeks ago
Natural Gas Bullish Momentum Remains as Resistance Tested
By: Bruce Powers | February 12, 2025
• Closing above the 50-Day MA and 38.2% Fibonacci retracement strengthens natural gas’s outlook, with resistance at $3.64-$3.69 as the next target.
Natural gas showed sustained strength on Wednesday with another test of resistance around $3.58. At the time of this writing, it continues to trade near the highs of the day. So far, the high of the day at the time of this writing was $3.58 and the low $3.47.
There was a slight rise above Tuesday’s high of less than $0.01 today and natural gas is on track to end the day above the 50-Day MA (orange) for the first time since January 27. It is also interesting to note that the 20-Day MA (purple) has now converged with the previously discussed price level of $3.58, the high for Tuesday.
Daily Close Above 50-Day Line is Bullish
A daily close above the 50-Day line is bullish and may provide a clue that indicates further underlying strength in the price of natural gas. Also, the 38.2% Fibonacci retracement level at $3.51 was exceeded for the second time today and a strong close above that price level looks likely. However, today’s rise was the first test of resistance around the 20-Day MA since the drop below it on January 27. Resistance has been seen but whether it can be sustained remains to be seen. Given the signs of underlying strength, a reclaim of the 20-Day MA may be possible before a pullback.
Reclaim of 20-Day Line Would Show Further Strength
If the 20-Day MA can be reclaimed, the next higher target zone is from around $3.64 to $3.69. That price zone consists of the prior swing high and peak for 2023 at $3.64, a 50% retracement level at $3.67, and a 127.2% extended target for a small rising ABCD pattern (not shown). The initial target for the ABCD pattern was completed at $3.58.
Now that the 20-Day line has fallen to converge with the $3.58, the $3.58 price zone takes on greater potential significance. Since a breakout above the 2023 high of $3.64 provided a new bullish trend reversal signal for the long-term trend in late-December, it is a key price level. A rise above it would be bullish, and especially a daily close above it.
Last week’s price range and likely this week as well are within the price range from two weeks ago from $2.99 to $3.83. Since the low end of the price range was tested as support with last week’s low, an upswing to test resistance near the week’s high could be in process.
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2 weeks ago
Crude Inventories Rise By 4.1 Million Barrels; WTI Oil Remains Under Pressure
By: Vladimir Zernov | February 12, 2025
Key Points:
• Strategic Petroleum Reserve increased from 395.1 million barrels to 395.3 million barrels.
• Domestic oil production grew from 13.478 million bpd to 13.494 million bpd.
• WTI oil traded near session lows as traders reacted to the report.
On February 12, 2025, EIA released its Weekly Petroleum Status Report. The report indicated that crude inventories increased by 4.1 million barrels from the previous week, compared to analyst forecast of +3 million barrels.
More information in our economic calendar
Gasoline inventories declined by 3.0 million barrels, while analysts expected that they would increase by 1.5 million barrels. Distillate fuel inventories grew by 0.1 million barrels from the previous week.
Crude oil imports averaged 6.3 million bpd, declining by 606,000 bpd from the previous week. Over the past four weeks, crude oil imports averaged 6.6 million bpd, so this week’s imports were below the four-week average.
Strategic Petroleum Reserve increased from 395.1 million bpd to 395.3 million bpd as U.S. continued to buy oil for reserves.
Domestic oil production increased from 13.478 million bpd to 13.494 million bpd. From a big picture point of view, domestic oil production remains at high levels.
WTI oil remained under pressure as traders reacted to the EIA report. Currently, WTI oil is trying to settle below the $72.00 level. Traders take some profits off the table after the strong rebound from recent lows.
Brent oil settled near the $76.00 level after the release of the report. It remains to be seen whether falling gasoline inventories will provide sufficient support to the market.
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2 weeks ago
Peace In Pieces. The Energy Report
By: Phil Flynn | February 12, 2025
Oil prices almost had a clear upside breakout missing it by 1 cent ahead of the American Petroleum Institute (API) report that is probably the reason it did not happen. The API had a historic 9.043-million-barrel supply increase as oil exporters are trying to export as much oil as they can ahead of another Trump oil sanction deadline.
That surge in supply is cooling off prices that had been rallying on strong demand, good OPEC compliance and geo-political risk factors like President Trumps zero tolerance being enforced on Iranian oil exports and worries that the Hamas-Israel ceasefire might end as prisoners that have been released by Hamas have been starved and tortured. President Trump has been disgusted by their treatment and warned that, “all hell is going to break out” if Hamas does not release “all” the remaining hostages this week. Israeli Prime Minter Benjamin Netanyahu said the ceasefire will not end if Hamas does not return all of the hostages by Saturday.
On the Russian front there was great news not only about the war in Ukraine but because President Trump secured the release of a US citizen being held in a Russian prison. President Trump welcomed home American schoolteacher Marc Fogel and said that Russian President Vladimir Putin had got “not much” in return. That is a stark difference from the deals made under the Biden administration. And we may even get peace in pieces with the war in Ukraine.
Ukraine’s President Zelensky says that the Ukraine is prepared to offer a territory swap with Russia. Ukraine will offer to swap territory with Russia in any potential peace negotiations to end the war. They may swap one territory for another adding he would offer Moscow territory the Ukraine seized in the Russian region. Zelensky, in an interview with The Guardian, said he planned to offer Russia control of Kursk in exchange for Ukrainian territory under Russian occupation. “We will swap one territory for another,” Zelensky said.
As I said, the oil inventories were overwhelming. The increase of 9.043 million in crude oil supplies is likely a historic build for this time of year. And that came as Cushing, OK crude supplies were up 407,000 barrels. Gasoline inventories did fall by 2.507 million barrels, which is a pretty impressive drop, but distillate inventories were just down 590,000 barrels.
US Energy Secretary Chris Wright is focused on the long-term future, addressing the impact of the Biden administration’s green energy initiatives. He proposed stopping coal plant closures, likely provoking environmentalists.
Bloomberg News reported that the United States should halt the closure of coal-fired power plants. Energy Secretary Chris Wright stated that this fuel source would remain crucial to the nation’s power system for decades to come. “We are on a path to continually shrink the electricity we generate from coal,” Wright said Tuesday on Bloomberg Television. “That has made electricity more expensive and our grid less stable.” Wright’s remarks come as demand for electricity is surging to feed power-thirsty data centers needed for artificial intelligence, new factories and the overall electrification of the economy. Also because Wright has an energy vision that is not based on fear but reality.
The Energy Information Administration released their Short-Term Energy Outlook. They expect OPEC+ production cuts will reduce global oil inventories and keep crude oil prices near current levels through the first quarter of 2025. Gradual increases in production combined with relatively weak global oil demand growth will increase global oil inventories in the second half of 2025 through 2026, placing downward pressure on prices through the remainder of our forecast. As a result, we forecast that the Brent crude oil price will average $74 per barrel (b) in 2025 before falling to $66/b in 2026.
Global oil production. The EIA forecast global production of liquid fuels will increase by 1.9 million barrels per day (b/d) in 2025 and 1.6 million b/d in 2026 because of a combination of supply growth from countries outside of OPEC+ and the relaxation of OPEC+ production cuts. We do not anticipate that the sanctions on Russia’s oil and shipping sectors announced on January 10 will significantly affect our oil production forecast.
U.S. petroleum products consumption. EIA expects U.S. distillate fuel oil consumption to increase by 4% in 2025 and remain flat in 2026 driven by GDP growth and increased industrial activity. We expect U.S. motor gasoline consumption to remain flat in 2025 as fuel efficiency gains outpace increases in driving. In 2026, we expect continued efficiency gains and slower employment growth will reduce gasoline consumption slightly.
Natural gas prices. The Henry Hub spot price averaged $4.13 per million British thermal units (MMBtu) in January and reached a daily high of $9.86/MMBtu on January 17 ahead of a cold snap that spread across the United States, leading to above-average inventory withdrawals. We expect the spot price to rise through 2026, averaging almost $3.80/MMBtu in 2025, up 65 cents from our January 2025 Short-Term Energy Outlook, and reach nearly $4.20/MMBtu in 2026.
Electricity generation. We expect generation in the U.S. electric power sector to increase by 2% in 2025 and by 1% in 2026, after growing 3% last year, led by growth in renewable energy sources. If electricity generation grows in each of the next two years, it would mark the first three years of consecutive growth since 2005–07. The share of U.S. generation from solar grows from 5% in 2024 to 8% in 2026 because of an expected 45% increase in the amount of solar generating capacity between 2024 and 2026. Conversely, we expect the share of U.S. generation from natural gas to fall from 43% in 2024 to 39% in 2026 as natural gas prices rise. Our forecasts for increases in solar and wind generation are based on the planned generator projects reported to us in our Preliminary Monthly Electric Generator Inventory.
Macroeconomic assumptions. The macroeconomic assumptions in this month’s forecast were finalized prior to the Executive Order on February 1, 2025, that imposed a suite of tariffs on Canada, Mexico, and China and the subsequent pause on February 3 for U.S. tariffs on Canada and Mexico. The macroeconomic model we use in the STEO is based on S&P Global’s macroeconomic model, which this month assumed a 10% universal tariff and a 30% tariff on imports from China and does not reflect current policy. We will continue to monitor and will update our outlooks as policies change.
Natural gas prices are soaring this winter. Fox Weather is reporting that another winter storm is unleashing its fury across the central U.S., bringing heavy snow and ice to portions of the Plains and Midwest, forcing officials to close state offices and schools and prompting warnings to delay travel if possible. This latest round of inclement weather comes just as the mid-Atlantic and Ohio Valley clean up after a storm system brought snow and ice to those regions and days after a winter storm slammed portions of the Northeast and New England last weekend. The FOX Forecast Center is also monitoring the development of another storm system that is expected to slam dozens of states over the upcoming weekend. Download the ap to keep up with the latest.
BP once was known as “beyond petroleum” as they thought that they should diversify into alternative energy based on pressure from climate activist. Now activists want them to make money. Quantum Commodity Intelligence reported that, “BP promised a major overhaul of its strategy on Tuesday as the struggling UK major reported its worst quarterly results since the pandemic. Following news that activist investor Elliot Management has taken a stake in the firm, BP’s new boss, Murray Auchincloss, is widely expected to shift the company’s focus further towards oil and gas and away from low-carbon energy.
SP Global Commodity Insights has found that OPEC’s crude output rose slightly on month to 40.54 million b/d in January. OPEC+ oil producers with quotas pumped 71,000 b/d above target in January. OPEC crude production fell 20,000 b/d in Jan, non-OPEC allies’ up 40,000 b/d. Russia said that they were in full compliance with cuts.
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2 weeks ago
Natural Gas Rises to $3.58 Before Facing Resistance
By: Bruce Powers | February 11, 2025
• Natural gas hit $3.58, breaking above key MAs, but resistance emerged; a strong close above $3.53 could signal further upside potential.
Natural gas proceeded to advance on Tuesday, rising to a high of $3.58 and completing an initial target from a small rising ABCD pattern (light blue) at $3.58. The advance broke out above both the 38.2% Fibonacci retracement at $3.51 and the 50-Day MA at $3.53, which was a sign of strength. However, since the daily high was reached, natural gas has weakened and fallen back below the line, at the time of this writing.
A daily close above the 50-Day line will be a stronger indication of strength than a daily close below the 50-Day line. Also, a daily close above the midpoint of the day’s trading range, currently at $3.50, will be a stronger indication than a close below that price level.
Close Above 50-Day MA Will Confirm Strength
A reclaim of the 50-Day MA was a sign of strength but the next target was hit at $3.58, followed by intraday signs of resistance. If demand can be retained, then natural gas looks likely to at least tap the 20-Day MA at $3.60 to test it as resistance. Moreover, the 20-Day line is declining and will likely converge with today’s high at $3.58 soon.
If the 20-Day line continues to fall, it risks dropping below the 50-Day MA. That would be a sign of weakness. As noted above, a daily closing price above the 50-Day line would show greater strength than a close below it. And a stronger close increases the chance that the 20-Day MA can be reclaimed as well.
Sustained Resistance at 50-Day MA Could Lead to Pullback
If the price area around the 50-Day MA continues to show signs of resistance, a bearish pullback to test support levels becomes a possibility. There are a couple key price levels to watch if that is the case. There is a minor swing low at $3.30 from last Friday, which is followed by a more significant swing low at $3.16.
That $3.16 swing low is more significant given its importance to the rising trend structure of higher swing lows and higher swing highs. It is marked (C) as a prime component of the rising ABCD pattern. Also, notice the small rising trendline marking dynamic support rising from the $2.99 swing low (A). That line can be watched for initial signs of weakness. As it looks now, today’s low at $3.43 can be used as a proxy for the trendline.
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2 weeks ago
Crude Oil Reclaims $72.83, Targets Higher Resistance Levels
By: Bruce Powers | February 11, 2025
• Crude oil reclaimed the 50-Day MA at $72.83, signaling strength. Watch resistance between $74.60-$74.89 and potential support at $70.91.
Crude oil further confirmed the recent swing low of $70.91 as support. On Tuesday, crude triggered a continuation of the rally from that low, reaching a new high of $73.99 for the bounce. Strength was also indicated by the reclaim of the 50-Day MA today, now at $72.83. Resistance was seen at the 50-Day line on Monday.
Today’s decisive breakout above the 50-Day line shows strength that should be sustained towards a test of higher prices. The day is likely to end with crude in a relatively strong position, in the top third of the day’s trading range. That top third of the range is above $73.54. Also, be aware that today’s low was a successful test of support at the 50-Day MA, which is a sign of strength.
Next Upside Target is $74.74
The next upside targets are the 200-Day MA at $74.74 and the 20-Day MA, now at $74.89. Notice that the 20-Day line is falling and close to converging with the 200-Day line. Each line presents potentially solid resistance on its own but more so if combined to identify a similar price area. Confirming the 200-Day line is the 38.2% Fibonacci retracement at $74.69. Together, they put a bull’s eye on a price zone from $74.6 to $74.89 and increases the chance of the price zone being tested as resistance.
Strong Resistance Looks Likely Around $75.85
Higher price targets start with the 50% retracement at $75.85. That price area is confirmed by the interim swing high at $75.82. The swing high is part of the bearish price structure for the recent correction as it was a lower swing high, relative to the recent $80.76 peak. Once support is successfully tested at the lower end of the week’s range, as seen on Monday, a swing back toward the top of the range is possible. This would be similar behavior to what is seen inside a consolidation pattern.
Once one side of the pattern is tested as either support or resistance, and a reversal sets up, the other side of the pattern becomes a potential target. If crude follows through as it might, the top of the weekly range at $75.82 becomes a target. Since the week’s high gives credence to the 50% target zone, it is possible that it is eventually reached. Moreover, the 50-Week MA is also nearby at $76.02.
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2 weeks ago
Bring In the Reserves. The Energy Report
By: Phil Flynn | February 11, 2025
Oil prices are on the rise as the Trump Administration starts to crack down on Iranian oil exports and concerns about the reserves of big oil companies. The market is also pricing in concerns that the ceasefire deal between Israel and Hamas could fall apart because Hamas it appears has starved its prisoners and now are reneging on the prisoner release. President Trump says all hell could break loose if the prisoners are not released.
Reuters reported this morning that Chevron’s oil and gas reserve have fallen to at least the lowest point in a decade in part because of the Biden administration’s anti-fossil fuel investment campaign along with the manipulation of the market by releasing oil from the Strategic Petroleum Reserves here and around the world. By artificially lowering price if it has discouraged investment along with the uncertainty created by the Biden administration has caused oil companies to find replacement reserves at the lowest level probably since the 1980s.
Globally, oil reserves are being consumed faster than they are being replenished. According to Rystad Energy, discovered volumes are at record lows, and the reserve replacement ratio (RRR) is 16%, meaning for almost every six barrels produced, only one is replenished according to a report released last year. This data suggests that President Trump’s energy emergency is real and not just political. President Trump realizes that if we’re going to power the economy of the future, we must change this death spiral. Not just here in the US but the world.
Bloomberg is reporting that US fuel makers are in a state of alarm as the water content of imported Mexican crude is up to six times higher than the industry standard. The low quality of imported Maya grade crude could upend a trade flow that has lasted for decades.
OIL Price reports that the Indian government is considering extra energy imports from the United States, days before Prime Minister Narendra Modi’s visit to the country and a scheduled meeting with U.S. President Donald Trump. Modi will visit the U.S. on February 12-13 and hold bilateral talks with Trump, India’s ministry of External Affairs had said on Friday. The U.S. is the fifth-largest crude exporter to India, following Russia, Iraq, Saudi Arabia and UAE. However, Indian refiners are open to buying crude from anywhere if the economics are compelling. Whereas Trump has pledged to lower fuel prices, he faces a conundrum considering that U.S. oil production is entirely in the hands of independent producers rather than a national oil company.
Trump also cut a deal with China to work on an LNG deal that Canadian Prime Minister Pierre Trudeau killed.
The Toronto Sun reported last week that after meeting with Japanese Prime Minister Ishida Shigeru on Friday, the U.S. President mentioned several trade initiatives with Japan – but specifically exporting liquified natural gas to Japan. This is the very deal Japan asked Canada for two years ago, in an attempt to wean their country off of Russian and Middle Eastern products. Trudeau refused their request, but on Friday, Trump boasted of what he says will be a great deal for America. “I’m also pleased to announce that Japan will soon begin importing historic new shipments of clean American liquefied natural gas in record numbers,” Trump said. “We’re talking about the pipeline in Alaska, which is the closest point of major oil and gas to Japan by far, less than half the distance of any other location,” he said. “We’re talking about a joint venture of some type between Japan and us, having to do with Alaska oil and gas.” Biden tried to price fix energy. That didn’t work and now it appears that China is giving up on that as well.
Bloomberg is repotting that, “China is preparing to scrap fixed pricing on renewable power, and let the market decide how much users pay for clean electricity. The central government has agreed that electricity generated by renewables should be freely traded, leaving it up to local authorities to propose and implement market pricing by the end of the year, the National Development and Reform Commission and the National Energy Administration said in a statement on Sunday. Generators will be cushioned from excessive price swings by balancing payments, they said.
As I mentioned last week oil seemed to be bottoming near the lower end of the trading range and now it looks like we could be on target to hit the upper end of the trading range. Crude oil is testing 7333 resistances, and any close above that area could suggest that the market is going to head towards $76 and potentially to the upper end of the trading range which is $80.00 a barrel.
We will get some direction from the Short-Term Energy outlook which is being released today at 11:00 central time from the Energy Information Administration as well as the American Petroleum Institute report. We do expect because of weather and other issues that we will see slight builds across the board. Crack spreads have exhibited significant fluctuations, yet they appear to indicate an upward trend in both diesel and heating oil markets.
The seasonal spreads also seemed to be working. February is normally a strong up month for April diesel as well as March RBOB gasoline. Spreads such as being long August to RBOB and short December gasoline seem to be attractive strategies. Additionally, if you are in good health, you might consider buying gasoline versus heating oil, often referred to as the “widow maker.” Bull spreads on crude oil are attractive, especially going long in June and short in December.
Reuters is reporting ChampionX (CHX.O), opens new tab expects new U.S. import tariffs on steel and aluminum to drive up equipment costs for oilfield service firms, a company official said on Tuesday. U.S. President Donald Trump raised tariffs on steel and aluminum imports on Monday to a flat 25% “without exceptions or exemptions” in a move he hopes will aid the struggling industries in the United States, but which also risks sparking a multi-front trade war.
Natural gas is surging as technical and weather fundamentals get in line. A potential short squeeze is developing in the natural gas.
The EIA reported that colder-than-normal temperatures across much of the United States in mid-January increased natural gas consumption, resulting in the fourth-largest reported weekly withdrawal from natural gas storage in the Lower 48 states, according to our Weekly Natural Gas Storage Report (WNGSR). During the week ending January 24, 2025, stocks fell by 321 billion cubic feet (Bcf), which was nearly 70% more than the five-year (2020–24) average withdrawal for the same week in January. With withdrawals in January totaling nearly 1,000 Bcf, U.S. natural gas inventories are now 4% below their previous five-year average after being 6% above the five-year average at the start of the 2024–25 heating season, which began in November.
For the week ending January 24, the South-Central region of the United States, which accounted for approximately 35% of working gas in U.S. storage, reported its fourth-largest withdrawal of 136 Bcf. In the East and Midwest, the regions with the next-largest storage inventories, stocks fell by 10% in the East and by 11% in the Midwest over the week. The East and Midwest are also the U.S. regions with the most natural gas consumption in the winter to meet space heating demand.
Temperatures in the U.S. Southeast fell to record lows, and snow fell in parts of Louisiana, Texas, and the panhandle of Florida, increasing natural gas consumption. During the week ending January 24, 2025, U.S. heating degree days (HDDs) reached 262, or 28% more than normal, according to the National Oceanic and Atmospheric Administration. Population-weighted HDDs represent temperature deviations lower than 65°F and are weighted based on population distributions across the country. These data help us model and forecast energy consumption in different regions of the United States. Cold weather also led to modest production declines in January because of freeze-offs, which occur when water and other liquids freeze at the wellhead or in natural gas gathering lines near production activities.
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2 weeks ago
Natural Gas Approaches Key Resistance at 50-Day Moving Average
By: Bruce Powers | February 10, 2025
• Natural gas nears resistance at the 50-Day MA, with a breakout above $3.52 potentially signaling continued bullish momentum and targeting $3.58.
Natural gas continued to rise towards the 50-Day MA on Monday with a new high for the short-term advance at $3.49. That high was a little shy of the 38.2% Fibonacci retracement at $3.51 and the 50-Day MA at $3.52. They loom a little higher and may yet be an area of resistance on the way up. A touch of the 50-Day line would be the first test of line as resistance since it failed as support on January 28. The first touch of a prior support line as resistance commonly shows signs of resistance. Also, a decisive breakout through the pivot would be a sign of strength.
On Track to Close Strong
At the time of this writing, natural gas was trading in the top third of the day’s trading range and looks likely to close the day in a similar way. A daily close today above last week’s high of $3.44 would provide an additional sign of strength for the developing uptrend. Moreover, today’s advance triggered a breakout above a falling trendline, and the closing price will likely be above it, which would be a sign of strength.
Possibly, upward momentum can stay strong enough for the 50-Day line to be reclaimed and then further exceeded. There is a rising ABCD pattern (light blue) on the chart with an initial target at $3.58. It provides the possibility of this. Nonetheless, it is higher target whether approached on a breakout through the 50-Day line or following a bearish pullback.
Heading Towards Top of Range?
Another item that is supportive of a continuation higher is the wide range engulfing candle pattern on the weekly chart (not shown) with a range of $2.99 to $3.83. Rather than engulfing the prior price action, this candle overrides subsequent price action. Last week’s trading range was within the price range of the week before. And this week’s price range could easily do the same.
Last week’s wide range could provide an environment like trading inside consolidation. Once support is tested at the bottom of a range, which happened with the swing low and weekly low at $2.99, a swing back in the other direction, in this case up. A decisive breakout above the 50-Day MA would provide the next sign of strength and possible continuation of the advance.
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2 weeks ago
Leveling The Field. The Energy Report
By: Phil Flynn | February 10, 2025
Oil prices are on the rise as risk on trading abounds as President Trump tries to level the global trade field by tacking on a 25% tariff on steel and aluminum imports into the US. This is sending a signal that the US is no longer a dumping ground for other countries subsidized metals. For years US steel and aluminum makers have complained about China and other countries dumping cheap metal now are basking in Trumps new tariffs. U.S. Steel and Alcoa stocks are rallying in premarket action, and it appears that President Trump is making American Companies great again.
It is also raising oil prices and US gasoline, and diesel crack spreads are rising. That should inspire more US oil and gas drilling and investments.
Last week the Baker Hushes rig count started to rise as drillers increased the oil and gas. The rig count is up four from last week at 586 rigs. A year ago, 623 rigs were active. The count shows that 480 rigs are drilled for oil, up one from the previous week, and 100 are drilling for natural gas, up two from the previous week. The count also shows six miscellaneous rigs, up one from the previous week.
There are more signs that President Trump is acting on his mandates to get Iranian oil exports back down to zero. President Trump is looking to sanction any shipping company that deals with Iranian oil or any banking situation. He’s even looking at ways to crack down on private Chinese oil companies that are continuing to buy Iranian crude. Oil Price reported that 3 vessels carrying Iranian crude to China have become the target of U.S. sanctions. The sanctions have affected one very-large crude carrier (VLCC) and two Aframaxes that the Treasury Department said helped move Iranian oil to China.
The Times of Isreal reported that US President Donald Trump said he would prefer to make a deal with Iran rather than “bombing the hell out of it,” in a media interview published Saturday, adding that Israel would not carry out a strike if there were an agreement. “I would like a deal done with Iran on non-nuclear. I would prefer that to bombing the hell out of it,” he told the New York Post aboard Air Force One on Friday. “They don’t want to die. Nobody wants to die.” “If we made the deal, Israel wouldn’t bomb them,” he predicted, though he also said he would not discuss potential negotiations with Tehran.
Still the AP reported that— President Donald Trump said Tuesday that he’s given his advisers instructions to obliterate Iran if it assassinates him. “If they did that they would be obliterated,” Trump said in an exchange with reporters while signing an executive order calling for the U.S. government to impose maximum pressure on Tehran. “I’ve left instructions if they do it, they get obliterated, there won’t be anything left.”
Oil and gas demand is also solid. While the markets are worried that tariffs will impede growth, the oil market seemed to suggest otherwise. President Trump may have to cut taxes on oil to get prices lower.
Weather is the key again for natural gas. Just when you bought into the spring like a weather tease, you are now going to get slammed, and you should have downloaded the Fox Weather ap. Fox Weather reports that arcade of winter storms to blast across US with snow expected to reach 200 million in 40 states. The FOX Forecast Center said at least three separate winter storms are expected to sweep across a large portion of the U.S. during the week ahead, bringing the threat of widespread snow and ice to tens, if not hundreds, of millions of Americans from coast to coast. Natural gas is moving on the forecast.
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2 weeks ago
Crude Oil Continues to Recover
By: Christopher Lewis | February 10, 2025
• The crude oil market is strong in the early hours of Monday, as the market continues to try to recover from the recent fall that we have seen. Traders continue to watch economic numbers, GDP, and central banks at the same time.
WTI Crude Oil Technical Analysis
The Light Sweet Crude oil market (US Oil) saw a slight rally in the early hours on Monday as it aims to reach the crucial $72.50 level. This price point has been an area of interest for some time, and it makes sense that the market continues to focus on it. Traders will be closely watching whether this level can be cleared because, if it is, there is a strong likelihood that the market will push toward the 200-day EMA, possibly even reaching as high as $78.50. In the long term, we recently pulled back into a massive consolidation area that is now acting as support, making it worth paying attention to.
Brent Crude Oil Technical Analysis
Brent crude markets have also seen gains in the early hours, having cleared the $75.50 level and now testing the 50-day EMA. A break above the 50-day EMA could open the door for a move toward the 200-day EMA, and if that level is surpassed, there is potential for a run to the $82 mark. While reaching $82 may take longer, I believe this is the likely trajectory.
Crude oil has established a strong base underneath, with Brent crude previously testing the $70 level, which was a three-year low. This is similar to what we have seen in the Light Sweet Crude market. Given these conditions, I believe we are in a recovery phase, and I remain bullish on oil for the time being and believe that we are in the middle of forming a range at this point in time.
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2 weeks ago
WTI Crude Oil CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | February 8, 2025
• Following futures positions of non-commercials are as of February 4, 2025.
WTI crude oil: Currently net long 215.4k, down 47.7k.
The week began with Monday’s unsuccessful attempt at reclaiming the 200-day moving average ($74.37), with the session high tagging $75.18. By the end of the week, West Texas Intermediate crude instead breached the 50-day ($71.83), closing the week at $71/barrel, down 2.1 percent.
WTI for months has gone back and forth between $71-$72 and $81-$82 before dropping out of the range last September. The range was recaptured as soon as 2025 began, but sellers showed up mid-January at $79.39.
Since a shooting star week four weeks ago, which showed up after rallying for three straight weeks, the crude has been under pressure the last three weeks.
This Thursday, WTI ticked $70.43 before a modicum of buying interest showed up. This is an opportunity for oil bulls to put their foot down, especially considering the technicals are oversold on the daily. Inability to do so will open the door toward $67, which attracted bids several times going back to last September.
In the meantime, US crude production in the week to January 31 increased 238,000 barrels per day week-over-week to 13.478 million b/d; output has come under slight pressure since registering a record 13.631 mb/d in the week to December 6. Crude imports, too, grew 467,000 b/d to 6.9 mb/d. As did crude and gasoline inventory which rose 8.7 million barrels and 2.2 million barrels respectively to 423.8 million barrels and 251.1 million barrels. Distillate stocks, on the other hand, went the other way – down 5.5 barrels to 118.5 million barrels. Refinery utilization firmed up one percentage point to 84.5 percent.
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2 weeks ago
NY Crude Oil Futures (CL) - Turning BACK DOWN »» Weekly Summary Analysis
By: Marty Armstrong | February 8, 2025
The NY Crude Oil Futures closing today at 7100 is immediately trading down about 1.00% for the year from last year's settlement of 7172. Caution is required for this market is starting to suggest it may now decline on the MONTHLY level. Up to now, this market has been rising for 4 months going into February suggesting that this has been a bull market trend on the monthly time level. As we stand right now, this market has made a new low breaking beneath the previous month's low reaching thus far 7043 while it's even trading beneath last month's low of 7179.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Crude Oil Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2020 and 2009 and 2001 and 1998 and 1994. The Last turning point on the ECM cycle high to line up with this market was 2022 and 2018 and 2011 and 2000.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The historical broader tone of the NY Crude Oil Futures has been a bearish consolidation following the high established back in 2008. Since then, this market has created 2 reaction highs which have been unable to break this overall protracted bearish consolidating trend. Still, the major low was made in 2023 and the market has bounced back for the last 2 years. The last Yearly Reversal to be elected was a Bullish at the close of 2023.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
From a perspective using the indicating ranges on the Daily level in the NY Crude Oil Futures, this market remains moderately bearish position at this time with the overhead resistance beginning at 7202 and support forming below at 7067. The market is trading closer to the support level at this time.
On the weekly level, the last important high was established the week of January 13th at 7939, which was up 8 weeks from the low made back during the week of November 18th. We have seen the market drop sharply for the past week penetrating the previous week's low and it closed beneath that low which was 7194. This was a very bearish technical indicator warning that we have a shift in the immediate trend. We are trading below the Weekly Momentum Indicators warning that the decline is very significant and we need to pay attention to the timing and reversals. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 7939 made 3 weeks ago. Still, this market is within our trading envelope which spans between 5777 and 8545. Immediately, this decline from the last high established the week of January 13th has been important, closing sharply lower as well. Before, this recent rally exceeded the previous high of 7288 made back during the week of November 4th. Nonetheless, that high was actually lower than the previous high made the week of October 7th suggesting this market has really been running out of sustainable buying for right now. This immediate decline has thus far held the previous low formed at 6653 made the week of November 18th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action as well as trend, long-term trend, and cyclical strength. Looking at this from a wider perspective, this market has been trading up for the past 11 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2021 while the last low formed on 2024. However, this market has declined in price with the last cyclical low formed on 2023 warning that this market remains weak at this time on a correlation perspective declining in both price and Momentum.
Interestingly, the NY Crude Oil Futures has been in a bullish phase for the past 4 months since the low established back in September 2024.
Some caution is necessary since the last high 7939 was important given we did obtain one sell signal from that event established during January. That high was still lower than the previous high established at 8767 back during April 2024. Nevertheless, at this time, the market is still weak trading beneath last month's low.
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2 weeks ago
Natural Gas Weakens Within Bullish Pattern
By: Bruce Powers | February 7, 2025
• Short-term bearish price action does not negate the bullish rising ABCD pattern targeting $3.58.
Natural gas lost its upward momentum on Friday as it fell below Thursday’s low to a low of $3.30. However, at the time of this writing, natural gas continues to trade near the lows of the day and may reach a lower price before the end of the day and week. It looks likely to close in the lower quarter of the day’s trading range and possibly below yesterday’s low. A close below that low will reflect a very weak closing price, and it opens the door to a bearish continuation heading into next week.
Inside Week Leads to Choppiness
As noted in prior articles, price action in natural gas since the January 31 swing low at $2.99 has been contained within last week’s price range. Last week ended with a wide range red candlestick pattern. Trading inside that range can lead to price behavior like what is seen inside a consolidation range. Choppy price action with unreliable follow-through is common. Therefore, it can be helpful to know what patterns are forming and evolving and the key price levels to pay attention to.
Pattern Integrity Retained
In the near-term, natural gas is in the process of advancing from the $2.99 swing low. Since then, it has formed a small rising ABCD pattern (light blue) as Thursday’s high generated a higher swing high (above B) and therefore a bullish trend continuation signal. Despite today’s bearish performance, if natural gas stays above the interim swing low at $3.16 the price structure of the ABCD pattern remains intact and a continuation higher is anticipated. That expectation would change on a drop below $3.16 as that would violate the integrity of the ABCD pattern of higher swing highs and higher swing lows.
ABCD Pattern Upside Target is $3.58
An initial upside target from the pattern points to $3.58. That is in the middle between two of the major moving averages. The 50-Day MA is at $3.52 and the 20-Day is at 3.65. Each line previously identified trend support, following the upside gap on October 29. During the subsequent advance the 50-Day line did a better job of holding as support until it was broken during the sharp drop on January 28. Therefore, it presents a potentially more significant price area, and it could stop an advance and lead to a bearish reversal. Watch and observe the behavior of natural gas around the 50-Day line, with this possibility in mind.
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2 weeks ago
The New Trump World Oil Order. The Energy Report
By: Phil Flynn | February 7, 2025
President Trump is like the pied piper of oil as the market continues to move on the latest Trump Truth Social posts or moves. Yesterday oil prices were down after a leaked story that Trump had a plan for peace ready between Russia and Ukraine. The plan was leaked, perhaps on purpose to get the ball rolling. The plan was detailed enough to suggest a ceasefire by Easter. Yet it was unclear whether that was the Western churches Easter using the Gregorian calendar or the Eastern Orthodox churches using the older Julian calendar named after JuliusCaesar. In the east Easter falls on April 16 and it the west it is April 20 son the world of global negotiations it’s nice to have a little flexibility.
Today Russia suggested that they are open to negotiations on Ukraine which could bring an end to the conflict and thereby allow sanctions to come off of Russian oil. At the same time a move by the treasury market has made Iranian oil “kryptonite “as the Trump administration announced sanctions that sent a clear message to anyone that’s dealing with Iranian oil either shipping or oil companies could be taking a huge risk. Yesterday the Department of the Treasury’s Office of Foreign Assets Control (OFAC) said they were sanctioning an international network for facilitating the shipment of millions of barrels of Iranian crude oil worth hundreds of millions of dollars to the People’s Republic of China (PRC).
The action they say, is consistent with the President’s February 4 National Security Presidential Memorandum directing the Treasury Department and other U.S. government agencies to enact maximum economic pressure on Iran in order to deny all paths to a nuclear weapon and counter Iran’s malign influence. They especially hit “Sepehr Energy and its affiliate companies, which they say operate under the umbrella of the AFGS, use deceitful evasion methods such as falsification of maritime documents to obfuscate the Iranian origin of the oil that it trades and transports to overseas buyers, including the PRC. This revenue stream generates billions of dollars for the AFGS each year, which is used to fund Iran’s military and proxies and their destabilizing activities around the world.”
And that may just be the start, and the oil world is on notice. The world now knows that Trump will do what he says he is going to do, so if you want to test him, do so at your own risk or peril. No one’s going to want to touch Iranian oil and even as President Trump put on the toughest sanctions on Iran that the world has ever seen. He is also holding out the olive branch for a potential deal with the Iranian regime.
On Truth Social he posted that, “I want Iran to be a great and successful Country, but one that cannot have a nuclear weapon. Reports that the United States, working in conjunction with Israel, is going to blow Iran into smithereens ARE GREATLY EXAGGERATED,” he wrote on Truth Social. “I would much prefer a Verified Nuclear Peace Agreement, which will let Iran peacefully grow and prosper,” he continued. “We should start working on it immediately and have a big Middle East Celebration when it is signed and completed. God Bless the Middle East!”
Today though Ali Khamenei the Supreme Leader of Iran is saying that talks with the US are “not intelligent wise or honorable” but at the same time doesn’t rule them out. And the reason why the Supreme Grand Poohbah isn’t ruling talks out is because he knows he may not have any other choice to support his failing terror supporting regime. Ultimately, he knows that his political survival may depend on bowing down to the demands of the Trump Administration.
It’s either that or watching his economy collapse before his very eyes. It’s not like his economy is doing any good anyway. And his dream of wiping Israel off the map has been shattered. Mr. Kamani complains about Trumps vision of the map with Israel still on it and said ““The Americans sit, redrawing the map of the world — but only on paper, as it has no basis in reality,” Khamenei said. “They make statements about us, express opinions and issue threats. If they threaten us, we will threaten them in return. If they act on their threats, we will act on ours. If they violate the security of our nation, we will, without a doubt, respond in kind.”
Kamanis bitter because his dreams to wipe Israel off the face of the map will never come true at least in his lifetime. And as oil tries to digest this as well as Trump’s tariff threats, oil demand is rocking.
The latest reports from India show that oil demand rose by 3. 1% this year to a near record 20.489 million metric tons in January. India’s demand for gasoline surged by over 6.7% and diesel demand increased by 4.2% year over year.
In the US we saw a big surge yesterday in the gasoline crack spread as it hit the highest level since June. That is a signal to refiners that they better get cracking and get some more gasoline in the system. The diesel crack hit the highest level since last month but seems to be hitting resistance.
The natural gas market has some conflicting chart patterns and closed slightly higher after a bullish EIA report. EIA reported that, “Working gas in storage was 2,397 Bcf as of Friday, January 31, 2025, according to EIA estimates. This represents a net decrease of 174 Bcf from the previous week. Stocks were 208 Bcf less than last year at this time and 111 Bcf below the five-year average of 2,508 Bcf. At 2,397 Bcf, total working gas is within the five-year historical range. So stocks are 111 BCF below the five year average is something that we haven’t seen in the natural gas market in the US for a very long time. This could be very significant if winter hangs around.
On the one hand the natural gas futures at the CME Group closed above its resistance but bearish traders are eyeing its downside gap. They believe it has to be filled before natural gas can move higher. Trend followers must be long but at the end of the day it may come down to the weather and how cold it’s going to be in February.
Some people are calling for winter to extend into March so you might want to pull out your green heavy jackets for Saint Patrick’s Day. Or it might be easier just to download the Fox weather app.
Regardless, Fox Weather is reporting that New York City, Boston among 30 million under Winter Storm Watch. Just as one winter storm that brought snow and ice exited the Northeast, a new winter storm is expected to slam similar areas over the weekend. New winter weather alerts have already been posted for cities that stretch from the eastern Rockies and Dakotas to New York City and even Boston.
And supplies below normal aren’t only a US phenomenon in natural gas. J Kemp Energy reported that Europe’s gas storage continues to empty at an unusually rapid rate with storage facilities less than 51% full on February 5 compared with more than 68% full on the same date in 2024 and 70% full in 2023. The rapid drawdown has pushing nearby futures contracts sharply higher with the front-month contract trading over €55 per megawatt-hour.
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