Oil prices marginally declined this week as the market grappled with a fading Middle East risk premium alongside uncertainty about a potential peace deal in Ukraine. US natural gas prices surged as cold weather in the US and Europe is boosting heating demand and LNG exports.
BKR Rig Count | The total active drilling rigs in the United States increased by 4 last week, to 592. Oil rigs increased by 7 to 488, and gas rigs dropped by 2 to 99. Rig count in the Permian Basin remained flat at 304 | Feb 21 | BKR NAM Rig Count
US Crude Inventories, excluding those in the Strategic Petroleum Reserve (SPR), increased by 4.6 MMbbl to 432.5 MMbbl (about 3% below the 5y average for this time of year). On the products side, gasoline decreased by 0.2 MMbbl (1% below the 5y average). Distillate fuels decreased by 2.1 MMbbl (12% below the 5y average). Total commercial petroleum inventories increased by 0.2 MMbbl | Feb 14 | EIA Weekly Report
OPEC+ is considering delaying a series of monthly supply increases set to begin in April due to fragile global oil markets. The group is split on how to proceed, with some members wanting to prioritize longer-term impact and others concerned about low oil prices. The delay in supply increases would mark the fourth time OPEC+ has postponed plans to revive production halted since 2022, with global supplies already expected to exceed demand this year | Feb 17 | Bloomberg
Brazil’s government on Tuesday approved joining OPEC+. Participation will be limited to the Charter of Cooperation Brazil where it won’t have any binding obligation such as production cuts nor will it participate in decisions. The National Energy Council also approved Brazil's membership in the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA) due to its strong presence in renewable energy and leadership in biofuel production | Feb 19 | Bloomberg
Kazakhstan is seeking discussions with Ukraine after a drone attack on Russian territory affected flows through the Caspian Pipeline Consortium link, which ships about 80% of Kazakh oil exports. The attack halted an oil pumping station, possibly reducing flows by about 30% during about two months of repairs, considered a very important issue for its economy. The risk of attacks on CPC remains high, particularly during upcoming negotiations over the war | Feb 19 | Bloomberg
President Trump is reviewing Chevron's ability to continue exporting crude from Venezuela, signaling an openness to tighter restraints on the oil giant's operations in the country. Under the current waiver from the US government, Chevron produces about a fifth of Venezuela’s oil. Trump said the US should tap its own crude resources instead of paying billions to Venezuela | Feb 18 | Bloomberg
US LNG exports have extended a record-breaking run as new projects increased production, a trend that could help to ease high prices in Europe and Asia. Pipeline gas flows to LNG export plants climbed to 15.7 Bcf, an all-time high and almost 20% more than a year ago. Higher exports are cementing the US as the world’s biggest supplier of the fuel, with output poised to roughly double by the end of the decade. Europe has turned to American LNG to help replace the loss of Russian pipeline gas since the 2022 invasion of Ukraine | Feb 19 | Bloomberg
Offshore drilling contractors Transocean and Noble are preparing themselves for a sluggish deepwater market in 2025 amid an oversupplied global crude market. While CEOs from both companies said they expect activity to pick up in 2026 and 2027, as operators are advancing multi-year projects that will spur a turnaround, they would not rule out the rebound’s possible delay if oil prices fail to rise. The weaker activity has primarily been in West Africa while the US Gulf of Mexico and South America have remained strong | Feb 21 | Enverus
Looking ahead
Rystad Monthly Oil Macro Report – February 2025 | Rystad expects product demand to rise from 103.3 million bpd in 2024 to 104.5 million bpd in 2025, largely unchanged due to concerns regarding the effectiveness of China’s stimulus measures, the US growth outlook and persistent economic challenges in Europe. Gasoline demand is set to strengthen this year, supported by Europe’s continued shift away from diesel and India’s growing economy. There is potential upside from the Trump administration’s expected move to scrap EV subsidies and Europe’s consideration of new subsidies to prevent Chinese market penetration, which could slow EV uptake. US tariffs on China, Canada, and Mexico and their impact on product demand remain a key risk, alongside any potential retaliatory measures. The OPEC+ decision to extend voluntary cuts until the end of 1Q25 pushed down Rystad’s 2025 liquid supply growth outlook from 2.9 million bpd to 2.7 million bpd in this month’s report. For 2025, Rystad estimates OPEC+ liquids supply will grow 845,000 bpd, led by increased volumes from Saudi Arabia, Iran, Kazakhstan, and Libya. There is a high level of uncertainty around geopolitical risk and compliance. Rystad has assigned a 50-50 chance of OPEC+ unwinding cuts or extending for another quarter in their base case, considering crude and liquids balances. Rystad has increased their Brent price forecast for 1Q25 to an average of $77 per barrel, up from $76 in January. Tight crude and liquids balances are expected to persist through the first three quarters of 2025 before significant loosening in 4Q25 due to declining demand and refinery runs. Backwardation has remained very wide, which could provide support for OPEC+ to unwind some cuts. | Feb 20 | Rystad
OPEC Monthly Oil Market Report – February 2025 | The global oil demand growth forecast for 2025 remains unchanged at 1.4 mb/d. The OECD is projected to grow by about 0.1 mb/d, y-o-y, while the non-OECD is forecast to grow by about 1.3 mb/d. This robust oil demand growth is expected to continue in 2026. Global oil demand for 2026 is forecast to grow by 1.4 mb/d, y-o-y, unchanged from last month’s assessment. The OECD is forecast to grow by about 0.1 mb/d, y-o-y, while demand in the non-OECD is forecast to grow by about 1.3 mb/d. Non-DoC liquids supply is forecast to grow by 1.0 mb/d, y-o-y, in 2025, revised down by 0.1 mb/d from last month’s assessment. The main growth drivers are expected to be the US, Brazil, Canada, and Norway. Non-DoC liquids supply growth in 2026 is also forecast at 1.0 mb/d, mainly driven by the US, Brazil and Canada. Meanwhile, NGLs and non-conventional liquids from DoC countries are forecast to grow by about 80 tb/d, y-o-y, in 2025, to average 8.4 mb/d, followed by an increase of about 0.1 mb/d, y-o-y, in 2026 to average 8.5 mb/d. Crude oil production by the DoC countries decreased by 118 tb/d in January, m-o-m, averaging about 40.62 mb/d, as reported by available secondary sources. Economic growth for 2025, and even more so for 2026, will depend on a variety of key assumptions. It remains to be seen how and to what extent potential tariffs and other policy measures will play out. So far, they are not anticipated to materially impact the current underlying growth assumptions. However, the impact of potential tariffs and other policy measures remains uncertain, both in terms of their scope and significance. Inflation is forecast to continue declining gradually in 2025 and to normalize towards 2026. Consequently, monetary policy accommodation is expected to continue in major advanced economies in the near term, albeit at a more cautious pace, due to the lingering persistence of certain inflationary pressures. The services sector is anticipated to remain the main driving force in global economic growth in the near term, with its growth dynamics normalizing in 2025 and continuing into 2026. The industrial sector is projected to gradually pick up, although uncertainties remain. Taking these growth trends and dynamics into account, the global economic growth forecast for 2025 remains unchanged at 3.1%. Growth in 2026 is expected to accelerate modestly, with a forecast of 3.2%, reflecting steady and sustainable global economic expansion – also unchanged from last month’s forecast | Feb 12 | OPEC
US to lead global ammonia capacity additions by 2030. The US is anticipated to be at the forefront of global ammonia capacity additions by 2030. This growth is expected to be driven by the availability of large natural gas reserves in the country, which provides a cost-effective feedstock for ammonia production. This abundance is a key driver for the expansion of ammonia capacity. By 2030, there are a total of 16 pre-construction projects in the US that are expected to add a total capacity of 21.82 mtpa. A major capacity addition is from the St Charles Clean Fuels St James Parish ammonia plant in Louisiana, which is currently under approval stage. It is expected to come online in 2028, with a capacity of 3mtpa | Feb 20 | GlobalData
