On April 1 OPEC+ will increase the global oil supply by 135,000 bpd, which is a tiny increase in a world that consumes over 100,000,000 bpd.
This will take more oil off the market: "President Donald Trump said Monday he would be placing a 25% tariff on all imports from any country that buys oil or gas from Venezuela as well as imposing new tariffs on the South American country itself. The tariffs would most likely add to the taxes facing China, which in 2023 bought 68% of the oil exported by Venezuela, according to a 2024 analysis by the U.S. Energy Information Administration. Spain, India, Russia, Singapore and Vietnam are also among the countries receiving oil from Venezuela, the report shows."
Trump has given Iran 60 days to end their nuclear enrichment program. The Supreme Leader of Iran is unlike to obey. Military action directly against Iran will take a million barrels of oil off the market.
Demand for oil-based transportation fuels goes up in Q2 each year.
Bottomline: The Global Oil Market is tight already and likely to be much tighter by the end of Q2.
Oil Price - March 25
Oil Price - March 25
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - March 25
The "Noise Level" is VERY HIGH.
Trading Economics:
WTI crude oil futures rose to around $69.40 per barrel on Tuesday, reaching its highest level in three weeks, amid concerns over tighter global supply after President Donald Trump announced a 25% tariff on U.S. imports from countries buying oil from Venezuela, which would go into effect on April 2. This could disrupt crude flows to key refiners in China, India, Spain, and the U.S. However, upward price momentum may be tempered by the administration’s order to extend Chevron’s deadline to wind down its oil operations and exports from Venezuela until May 27. Further weighing on the outlook, Ukraine-Russia ceasefire talks raised the prospects of increased Russian oil exports if a resolution is reached, and the OPEC+ production hike as early as April also pointed to more supply. Meanwhile, investors await clarity on Trump’s reciprocal tariffs next week, with uncertainty over the size of the duties and targeted countries.
Trading Economics:
WTI crude oil futures rose to around $69.40 per barrel on Tuesday, reaching its highest level in three weeks, amid concerns over tighter global supply after President Donald Trump announced a 25% tariff on U.S. imports from countries buying oil from Venezuela, which would go into effect on April 2. This could disrupt crude flows to key refiners in China, India, Spain, and the U.S. However, upward price momentum may be tempered by the administration’s order to extend Chevron’s deadline to wind down its oil operations and exports from Venezuela until May 27. Further weighing on the outlook, Ukraine-Russia ceasefire talks raised the prospects of increased Russian oil exports if a resolution is reached, and the OPEC+ production hike as early as April also pointed to more supply. Meanwhile, investors await clarity on Trump’s reciprocal tariffs next week, with uncertainty over the size of the duties and targeted countries.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - March 25
Renewables and natural gas surge ahead of oil and coal.
Reuters:
There is something positive for every type of energy in the International Energy Agency's latest global review, but the loudest cheers will be from renewables and natural gas.
The world's energy demand grew at 2.2% in 2024, a pace described as "faster than average" by the IEA in its Global Energy Review, released on Monday. The acceleration was led by emerging and developing economies, which accounted for more than 80% of the growth, while the leading sector was electricity, which grew by 4.3% in 2024, or nearly double the annual average of the past decade.
Reuters:
There is something positive for every type of energy in the International Energy Agency's latest global review, but the loudest cheers will be from renewables and natural gas.
The world's energy demand grew at 2.2% in 2024, a pace described as "faster than average" by the IEA in its Global Energy Review, released on Monday. The acceleration was led by emerging and developing economies, which accounted for more than 80% of the growth, while the leading sector was electricity, which grew by 4.3% in 2024, or nearly double the annual average of the past decade.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - March 25
IEA analysts "officially" expect global demand to reach 103.9 million barrels per day this year. IEA has a long history of under-estimating global demand, because it is based in Paris, France and the people that sign their paychecks are "Climate Change Wackos".
Demand for oil-based products will keep going up year-after-year until it is forced to be rationed by price.
Demand for oil-based products will keep going up year-after-year until it is forced to be rationed by price.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - March 25
BEIJING, March 25 (Reuters) - China Construction Bank (601939.SS), opens new tab, one of the country's biggest commercial lenders, said on Tuesday that it would aim to provide no less than 8 trillion yuan ($1.10 trillion) in financing for the private economy by the end of 2027.
HFI Research: "I will go as far as saying that it almost doesn't matter what non-OPEC supplies do at this point. There's no scenario where supplies surprise to the upside that will kill the oil market. The only thing that can deter the bulls is a material demand drop, and with this (new stimulus package) China announcement, we see this possibility as extremely low."
MY TAKE: Demand for oil-based transportation fuels ALWAYS increases in the spring. It starts with "Spring Break" trips in mid-March and continues to increase through at least June. Plus, it takes more crude oil to make "Summer Blend" gasolines, which is why gasoline prices go up ~10 cents per gallon in the summer.
HFI Research: "I will go as far as saying that it almost doesn't matter what non-OPEC supplies do at this point. There's no scenario where supplies surprise to the upside that will kill the oil market. The only thing that can deter the bulls is a material demand drop, and with this (new stimulus package) China announcement, we see this possibility as extremely low."
MY TAKE: Demand for oil-based transportation fuels ALWAYS increases in the spring. It starts with "Spring Break" trips in mid-March and continues to increase through at least June. Plus, it takes more crude oil to make "Summer Blend" gasolines, which is why gasoline prices go up ~10 cents per gallon in the summer.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group