Coquest

Your Daily Energy Report for February 25, 2025

Posted on 2025-02-25

Crude Oil

Crude Oil futures for April settled down -$1.77 or -2.504% at $68.93. Oil prices dropped on Tuesday, nearing their lowest point since December 10th. This decline was influenced by shifts in US foreign policies under President Trump, alongside broader concerns regarding the American economy. President Trump's confirmation of tariffs on Canadian and Mexican imports starting March 4th could potentially reduce global oil demand. Moreover, ongoing negotiations for a peace agreement with Russia might lead to eased sanctions and increased oil supply. Uncertainty surrounding China's economic strategies further compounded pressure on oil prices. On the supply side, new US sanctions targeting Iranian oil brokers, shipping firms, and Iran’s state oil company raised concerns about tighter supply conditions. Iran, the third-largest producer within OPEC, produced 3.2 million barrels per day in January. Additionally, both the EU and UK imposed fresh sanctions on vessels involved in transporting Russian oil.
 

Natural Gas

Natural Gas futures for March settled up $.18 or 4.507% at $4.174. Natural gas prices jumped today, driven by strong demand for LNG exports and a tightening supply outlook. This increase occurred despite production remaining near peak levels, as unexpected cold earlier in the year led to substantial storage drawdowns. Current stockpiles sit about 11% below the five-year average, heightening concerns over supply constraints. In the Lower 48 states, gas output has been volatile, recently recovering to 104.3 bcfd after dropping to 100.5 bcfd amid severe cold weather. Forecasts indicate predominantly warmer-than-usual temperatures through mid-March, which may reduce consumption and put downward pressure on prices. Investors and analysts are closely tracking weather patterns and supply trends to anticipate market shifts.

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