Russia and US meet to discuss peace in Ukraine
February 18, 2025
The energy markets were closed yesterday, and it was a very quiet day. There was not a lot of new energy news.
These markets are still stuck until an event or major announcement comes out. I am not a very good bear as my bias leans toward what could potentially drive these markets higher. That keeps me very cautious about where prices are headed. I think the majority of people think that energy prices are flat to lower going forward as the major thing creating this sentiment is President Trump. His mantra to drill baby drill, and the reports that he has asked OPEC+ to produce more to help ease prices drives this narrative.
Along with this, most of the big investment banks’ outlooks have a lower average price for calendar 2025 than where prices are currently. This would mean prices having to be lower at some point to bring the overall average down to the current lower predictions.
The Oxford Institute For Energy Studies researched Russian oil and gas revenues. Here are 28% year-on-year in ruble terms on the back of continued economic growth of about 4%. Within the total federal budget revenue, oil and gas registered its second-highest level in the past seven years in ruble terms, accounting for 30% of the total.
Total US crude oil inventories sit at 427.9 million barrels and that is 4% below the five-year average for this time of year. US gasoline total inventories are 1% below the five-year average for this time of year. Distillates are 11% below the five-year average for this time of year. Propane inventories are just slightly below the five-year average for this time of year.
Russia and the US are meeting in Saudi Arabia to work on a peace deal for the war between Russia and Ukraine. Europe and Ukraine have not been invited and that is a point of consternation. Either way this meeting has the energy markets currently with at least some glimmer of hope that this is a start, and prices are capped in for now on this news.
Energy markets are still stuck in congestion but the news headline on the negotiation may lead to a bit more volatility here in the near term.