Russia-Ukraine: Russian President Vladimir Putin expressed interest in meeting U.S. President Donald Trump to discuss the Ukraine war and energy prices, emphasizing shared interests as major oil producers. He blamed Ukraine’s 2022 decree banning talks with him as a barrier to peace and called on Western nations to pressure Ukraine to revoke it. Ukrainian President Volodymyr Zelenskiy accused Putin of manipulating Trump’s peace efforts. Both leaders highlighted energy and geopolitical tensions as key areas for U.S.-Russia dialogue, with Trump urging OPEC to lower oil prices.
OPEC+ Yetto React: OPEC+ has not responded to U.S. President Donald Trump's call for lower oil prices, emphasizing its plan to increase output starting in April 2025 to ensure long-term market stability. Some OPEC members, like the UAE and Iraq, are advocating for a faster output increase due to their expanded capacity. Trump's call for lower prices also ties into his broader strategy to push for an end to the Russia-Ukraine war, though the Kremlin dismissed the idea, stating the conflict is about national security rather than oil. OPEC+ is set to review its policy at a meeting on February 3, with decisions expected in early March.
Rig Count: U.S. energy firms reduced the number of active oil and gas rigs for the third consecutive week, bringing the count to 576, the lowest since December 2021, according to Baker Hughes. Oil rigs fell by six to 472, while gas rigs increased by one to 99, with the Permian Basin experiencing its largest weekly decline since August 2023. Despite the drop in rig activity, the U.S. Energy Information Administration expects crude and natural gas production to hit record highs in 2025, driven by rising demand and higher gas prices.
Market Overview: Oil prices are lower to start Monday after U.S. President Trump called for OPEC to reduce prices, aiming to weaken Russia’s finances and end the war in Ukraine. Despite these comments, OPEC+ has not yet responded, with plans to increase oil output starting in April. Analysts have mixed views on the impact of sanctions on Russian oil production, with some forecasting minimal disruptions as higher freight rates and discounts on Russian oil continue to attract buyers.
Retail GasOutlook
The U.S. Energy Information Administration forecasts a gradual decline in retail gasoline prices through 2026, driven primarily by falling crude oil prices and improved vehicle fuel efficiency. Gasoline prices are expected to decrease by 11 cents per gallon in 2025 and an additional 18 cents in 2026, though the reductions will be smaller than those between 2022 and 2023. Lower refinery capacity, including the closures of major refineries, may offset some of the price declines and lead to increased imports to meet demand. Regionally, prices are projected to decrease in most areas, with exceptions like the West Coast in 2026 due to reduced production capacity.
Oil prices fell by approximately 2% on Monday, with U.S. West Texas Intermediate crude declining to $73.17 per barrel, its lowest level since December 31. The drop was driven by weak economic data from China, concerns over U.S. tariff threats, and fears about their potential impact on global economic growth and energy demand. Market sentiment was further unsettled by the rapid rise of Chinese startup DeepSeek's AI model, which raised questions about U.S. energy firms' AI-driven growth strategies. Uncertainty over U.S. sanctions on Colombia also weighed on the market, though an agreement to maintain crude exports provided some relief. Analysts noted persistent negative sentiment amid OPEC+'s measured approach to upcoming production adjustments.
