Market Insights > First Look

First Look - Oil slides lowest since December on potential Ukraine peace talks

WTI crude dropped 97c, or 1.4%, to $70.40 Thursday morning as a potential deal between Russian and Ukraine continues to exert downward pressure on oil prices
- Peace talks between Washington and Moscow have fueled speculation that disruptions on Russia’s oil flows could end
- Meanwhile, concerns over Trump imposing new reciprocal tariffs still loom adding to market anxiety, potentially reducing demand growth
- The latest EIA data also showed a larger-than-expected rise in US crude inventories, up by 4.1 MMBbl
IEA lifts oil demand outlook (WSJ)
- The IEA estimates global demand to grow by 1.1 MMBbl/d this year from 1.05 MMBbl/d previously, reaching a total of 104 MMBbl/d on average
- Improved compliance with output quotas among OPEC+ is reducing a projected supply surplus in the market
- Growth in 2025 will exceed 2024 but will remain below the 2023 level of over 2 MMBbl/d

Natural gas prices rise more than 15c to a multi-week high
- The March Henry Hub contract is now at the highest level since January, with prices up more than 30c this week
- The EIA is expected to report a -92 Bcf withdrawal from storage, according to the Bloomberg survey
  - The deficit to the five-year average should narrow from its current level of -111 Bcf
Weather forecasts continue to shift colder (CWG)
- Forecasts cooled for a second consecutive day, with models strengthening the upcoming cold front while warming in the 11-15 day period
- Lower 48 temperatures are expected to be below normal for most of the next two weeks, with a significant cold snap anticipated next week
- If forecasts pan out, this could be one of the top five coldest Februarys of the past 25 years, following a similarly high-ranking January
- While this weather event should lead to increased demand and storage withdrawals, there is only about one month remaining in the storage withdrawal season