Europe Gas Prices Fall on Prospects of Lower Gas Storage Target — Market Talk

By Anthony Harrup

U.S. crude oil inventories likely increased last week with refineries running at a slightly slower pace, while product stocks are expected to have declined, according to a survey by The Wall Street Journal.

Commercial crude stockpiles are seen rising by 1.7 million barrels to 434.2 million barrels in the week ended Feb. 21, according to the average estimate of 10 analysts and traders. Eight expect an increase and two predict a decline. Expectations range from a stock build of 4.5 million barrels to a drawdown of 3.1 million barrels.

Gasoline inventories are expected to be down by 600,000 barrels at 247.3 million barrels, with estimates ranging from an increase of 3 million barrels to a decrease of 2.2 million barrels.

Stocks of distillate fuel, mostly diesel, are estimated to have fallen by 2 million barrels to 114.6 million barrels. Forecasts range from a decrease of 4.2 million barrels to an increase of 1.7 million barrels.

Refinery capacity use likely fell by 0.3 of a precentage point to 84.6%, according to the Journal survey, with estimates ranging from an increase of 0.4 of a percentage point to a 1 percentage point decline. Two analysts didn't forecast refinery runs.

The U.S. Energy Information Administration is scheduled to release the inventory data on Wednesday at 10:30 a.m. EST.

 
                                   Crude   Gasoline Distillates Refinery Use 
   Again Capital                     2.4     -1.4     -2.8      -0.8 
   Commodity Research Group          3.3      0.3     -2.1      -0.2 
   Confluence Investment Management  2.0     -1.5      1.0      -1.0 
   Rystad Energy                     1.1     -1.4     -4.2       0.4 
   Excel Futures                     4.3     -1.5     -2.8      -0.4 
   Spartan Capital Securities       -1.7      0.6      1.7       n/f 
   Mizuho                            2.5     -1.0     -1.0       0.3 
   Price Futures Group               2.0      3.0     -4.0       unch 
   Ritterbusch and Associates        4.5     -1.0     -3.5      -0.9 
   Tradition Energy                 -3.1     -2.2     -1.9       n/f 
 
   AVERAGE                           1.7     -0.6     -2.0      -0.3 
 
 

Note: Numbers in millions of barrels, with the exception of refinery use, which is in percentage points.

n/f = no forecast

unch = unchanged

Write to Anthony Harrup at anthony.harrup@wsj.com

The risk-off attitude throughout markets today is noticeable in how grain futures are trading, with threats of tariffs to come to Canada and Mexico as soon as next week, traders are turning more cautious, says Sterling Smith of StoneX. This week's USDA Agricultural Outlook Forum is also a factor pushing traders toward a risk-off view, particularly when it comes to corn and the expectation of higher corn acres planted this spring. "This all being done against the background of fund length, which is seeing some of the profitability eroded," Smith. Most-active corn futures are down 1.2%, while wheat sinks 1.3% and soybeans inch lower by 0.1%. (kirk.maltais@wsj.com)

Lumber futures surpassed $630 per thousand board feet in February, the highest since October 2022, amid tariff concerns and tightening supply.

U.S. President Trump reaffirmed Monday that tariffs on Canadian and Mexican imports remain "on time and on schedule," despite both nations' efforts to bolster border security and curb fentanyl flows ahead of the March 4th deadline.

The National Association of Home Builders warned that higher tariffs on lumber and gypsum could push prices up 40%, worsening affordability and slowing the housing market’s recovery.

Meanwhile, U.S. building permits edged up 0.1%, signaling stability, while housing starts plunged 9.8%, pointing to near-term weakness.

On the supply front, North American production fell by 3.1 billion board feet in 2024 due to widespread sawmill closures, particularly in Canada, where rising costs forced cutbacks.

Crude oil futures retreated to levels last seen in 2024 late Tuesday morning, joining a selloff in equities, cryptocurrency and other commodities.

West Texas Intermediate crude futures settled below $70/bbl in seven December trading sessions. The NYMEX April WTI contract traded as low as $68.83/bbl Tuesday morning with the high and low separated by more than $2.30. The April Brent contract traded between $72.87/bbl and $75.256/bbl and was down by $1.81 to $72.97/bbl just ahead of midday.

Much of the weakness appears to be inspired from the plunge in crypto and equities, along Iraq's announcement that oil exports from Kurdistan to Turkey would resume this week.

Tuesday's slide also comes days after Goldman Sachs told clients it expected Brent oil would rise to $79/bbl before the end of February.

Diesel contracts were also under pressure in the morning session. ULSD futures fell to a 2025 low of $2.3669/gal on Feb. 6 and the NYMEX March ULSD contract was within 2cts of that mark on Tuesday, down 5.05cts to $2.3853/gal, leaving some market sources concerned that selling could speed up in the afternoon session.

Gasoline contracts were also lower and OPIS Volume surveys for last week show demand again trailed the comparable week of last year. Many traders had assumed 2025 demand would be flat or slightly above 2024 levels, but there have been few signs of that so far this year.

The NYMEX March RBOB contract was down by 4.37cts to $1.9673/gal ahead of midday and the summer blend April contract was 4.43cts lower at $2.2129/gal.

The weaker prices have come despite the switch to lower RVP fuel in several U.S. markets.

Chicago and Northern California made the switch to summer-spec fuel on Tuesday. Chicago spot prices were up by about 7cts, but all other U.S. spot markets were down by 3-7cts.

Spot gasoline prices in California, which have been rising over concerns over a potentially prolonged outage of PBF Energy's 157,000 b/d Martinez refinery near San Francisco, may soon receive more supply. Reports suggest more than 10 cargoes of gasoline may arrive in the state between now and mid-August, more than making up for the loss of the Martinez plant.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

• Reporting by Tom Kloza, tkloza@opisnet.com; Editing by Jeff Barber, jbarber@opisnet.com

Bank of America on Monday predicted Brent crude futures will average $75/bbl this year, as a possible tariff war and uncertainties over sanctions on Russia and OPEC+ production would put a lid on oil prices.

Despite oil price's steady decline from a record high of $122/bb in 2022, Brent futures have traded in backwardation on a combination of low global oil inventories, steady demand-supply balances and ample OPEC spare production capacity.

Backwardation is a market condition that typically signals market tightness when prompt prices are higher than future deliveries.

BofA said oil futures' backwardation has been mainly driven by the OPEC+ policy to curb output with an aim to keep global inventory low and set a floor of $70/bbl.

"Multiple policy uncertainties on trade, sanctions, foreign affairs and even OPEC+ output will likely tilt the balance lower for prices," it said.

BofA forecast Brent to average $73/bbl in 2026. The bank also expects West Texas Intermediate futures to average $71/bbl this year. On Tuesday, April Brent traded at around $73/bbl, and April WTI was at $69/bbl.

Also, the bank said it expects global oil demand growth to average around 1.1 million b/d for 2025 and 2026 following what it called "peak oil demand growth" of 2.3 million b/d in 2023.

"Thereafter, demand for oil should embark on a slower growth path as EVs impact transport fuel use, averaging roughly 106 million b/d over 2025-30 in our projections," it said.

Through 2030, the bank predicts Brent prices to average between $60/bbl and $80/bbl due to expected slow oil demand growth and without drastic changes to oil market fundamentals.

Earlier in February, BofA said in a note that it expects global oil use may struggle to increase above 1% year to year after 2030, as emerging Asian economies instead of the West will be driving oil growth.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

• Reporting by Frank Tang, ftang@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com

Oat increased to a 4-week high of 369.50 USd/Bu.

Over the past 4 weeks, Oat gained 5.44%, and in the last 12 months, it increased 1.73%.