Oil prices were under pressure early on Tuesday morning despite the Trump administration announcing fresh sanctions on Iran’s oil industry on Monday.
– President Trump’s recent push for a deal between Russia and Ukraine, his foot-dragging over Canadian and Mexican tariffs, and expectations of OPEC+ supply increases from April onwards have seen interest in crude oil futures plunge to multi-month lows.
– Open interest in WTI futures is now the lowest in nine months, falling to 2.12 million lots in the week ending February 18 according to CFTC data, with investors switching en masse to gold.
– The net length held by hedge funds and other money managers has posted four straight week-over-week declines and now stands at the equivalent of 103 million barrels, its lowest since October 2024.
– After hedge funds were incessantly shorting diesel futures in the US between June 2024 and January 2025, positioning in the ULSD futures contract finally turned long and net length ticked in at 11,872 lots in CFTC’s most recent data, suggesting tight distillate stocks could be a moderately bullish factor over the upcoming weeks.
Market Movers
– US oil major ConocoPhillips (NYSE:COP) agreed to sell its interests in the US Gulf offshore fields Ursa and Europa to Shell (LON:SHEL) for $735 million, as part of its divestment program after the $22 billion Marathon Oil takeover.
– Norway’s national oil firm Equinor (NYSE:EQNR) is reported to be looking to sell its onshore assets across Argentina’s Vaca Muerta shale play, believed to be worth some $1.3 billion with YPF potentially using its right of first refusal.
– Canada’s Equinox Gold (TSX:EQX) has agreed to acquire Calibre Mining (TSX:CXB) in a $1.8 billion all-stock deal, creating the second-largest gold producer in Canada with an implied market cap of $5.4 billion.
– Portugal’s national oil company Galp Energia (ELI:GALP) reported a significant discovery of light oil and gas condensate in its Mopane-3X well, confirming huge reserves in its 2024 multi-billion-barrel find.
Tuesday, February 25, 2025
At the same time that US-Russia talks on a final Ukraine settlement are underway, the Trump administration has been tightening the screws on Iranian oil supply. The White House announced yet another round of sanctions on anyone believed to facilitate Tehran’s exports to China. Despite that move, ICE Brent futures currently trading around $74 per barrel, beneath the $74.29-77.00 per barrel range that has so far contained every single settlement this month.
Trump Mulls Revival of Keystone XL. US President Donald Trump called for the immediate relaunch of TC Energy’s (TSE:TRP) 800,000 b/d Keystone XL pipeline, supposed to bring heavy Canadian barrels to US refineries, saying the project was ‘viciously jettisoned’ by the Biden administration.
US Slaps New Sanctions on Iran’s Fleet. The US Treasury Department imposed new sanctions on Iran’s oil industry this Monday, blacklisting more than 30 brokers and shipping companies for their alleged participation in trades, in line with President Trump’s maximum pressure pledge on Tehran.
Europe Lifts Sanctions Against Syria. European Union countries lifted most of sanctions against Syria, including restrictions on energy, banking and transport, a month after former al-Qaeda commander Mohammad al-Julani seized power from Bashar al-Assad, also lifting asset freezes for banks.
BP Continues to Review Corporate Strategy. UK oil major BP will scrap its target of increasing renewable generation 20-fold by 2030, to be announced this week by chief executive Murray Auchincloss, as its current 8.2 GW renewable generation capacity is a mere fraction of the 50 GW required.
M&A Megadeals Shift to Service Companies. Italy’s Saipem (BIT:SPM), one of the world’s largest oilfield services companies, has agreed to merge with Norway’s Subsea 7, creating a global services giant with revenues of $21 billion per year and an order backlog of some $45 billion.
Guyana’s Surge Triggers South American FOMO. The political class of French Guiana is lobbying the French government to revoke its 2017 moratorium on oil and gas prospecting and allow oil companies to appraise the region’s offshore resources, prompted by neighboring Guyana’s success.
Defying Damage, CPC Flows Continue. Flows through the CPC pipeline that brings Kazakh oil to global markets continue uninterrupted despite last week’s Ukrainian drone attack on a pumping station in Russia, casting doubts on whether damage repair could be done quicker than two months.
EU Carbon Border Idea Runs Aground. Brussels is set to water down its carbon border adjustment mechanism (CBAM) by exempting some 99% of European businesses from paying levies on CO2 emissions in imported goods, setting…
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