Market Insights > First Look

First Look - Oil on track for third weekly drop

Oil is headed for a third weekly decline amid fears of President Trump’s renewed trade war on China and tariff threats looming for other countries
- Trump also reaffirmed plans to boost US oil production to drive crude prices lower
  - This pledge came amid concerns of an already elevated supply, following a greater-than-expected rise in US crude stockpiles
Oil tanker crisis looms for Russia (BBG)
- The US has sanctioned 161 oil tankers for moving Russian oil, driving a surge in freight costs
- Costs for finding tankers to carry Russia’s flagship Urals oil to Asia has jumped by almost 50% since the sanctions were imposed, according to Argus Media
  - The price difference between when barrels are exported from Russia and when they reach Asia—serving as an indicator of delivery costs—has significantly increased.
First US sanctions hit on Iranian ships in China trade (Bezinga)
- The sanctions target a few vessels carrying Iranian oil, affecting one VLCC and two Aframaxes funneling crude to China
- WTI briefly rebounded to $71 per barrel on Thursday following news of sanctions
- The sanctions are seen as “warning shots” as they do not materially impact Iran’s oil exports, but underscores Washington’s ongoing effort to curb Tehran’s oil revenues

Natural gas is heading for a weekly gain, reversing some of last week's losses
- March Henry Hub prices are up about 30c this week, following last week’s sharp decline
- Prices are trading slightly lower this morning despite a further reduction in temperatures in the 1-15 day forecast period
- Yesterday, the EIA reported a -174 Bcf withdrawal, leaving inventories 111 Bcf below the five-year average, unchanged from last week
Mexico to expand gas-fired power generation (S&P)
- Mexico is looking to add 30 GW of power generation by 2030, mostly from natural gas power plants
- The majority of gas consumed in Mexico is supplied by the US, with pipeline imports averaging about 6-7 Bcf/d, with consumption rising during the summer months when power demand peaks
- Higher power sector demand could increase the call on US supply