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First Look - Oil struggles as economic worries and tariffs threaten market stability

Oil prices headed for weekly loss
- WTI for April delivery dipped 1% to $69.46 a barrel Friday morning
- Bearish sentiment is driven by concerns over the US economy and a potential trade war
- Economic worries stem from the Bureau of Economic Analyses’ second estimate for Q4 2024 GDP, which suggests a slowdown from 3.1% in Q3 to 2.3% in Q4
- The Trump administration announced tariffs, including a 25% on Mexico, a 10% tax on Canadian oil and electricity, and an additional 10% tariff on Chinese imports, set to take effect on March 4
- The Bloomberg Dollar Spot Index was up 0.1% on Friday, after its largest one-day gain of the year on Thursday
  - The stronger dollar reduces the attractiveness of commodities priced in dollars, potentially lowering demand
OPEC+ production plans remain unclear (OilPrice)
- Last week, the market anticipated OPEC+ would once again delay its planned production increases for April
- However, there is growing concern that OPEC+ may proceed with unwinding production cuts as scheduled for April
- According to Reuters, OPEC+ is monitoring several factors, including Russian peace talks, the re-imposition of maximum pressure on Iranian oil exports, and the rescinding of Chevron’s license to operate in Venezuela

Natural gas heads for a weekly loss as prices turn lower
- The April Henry Hub contract is trading lower today and heading for the first weekly loss in three weeks
- Production continues to push higher, reaching 104.5 Bcf/d
- Higher gas prices over the past month have led to weaker power burn numbers relative to coal, with gas occupying about 65% of the coal+gas mix compared to about 75% last year when prices were lower
- LNG feedgas demand remains strong around 16 Bcf/d
Environmental groups challenging Regional Energy Access (S&P)
- FERC’s reinstatement of a certificate for Transco’s 829 MMcf/d Regional Energy Access project is being challenged by a coalition of environmental groups who argue that FERC failed to get public feedback
- A hearing request has been filed by the groups seeking to get the new permit canceled, although the project is already in service