Russia-Ukraine: President Trump is scheduled to hold a significant phone call with Russian President Vladimir Putin today to negotiate a ceasefire in the ongoing Russia-Ukraine conflict. The conversation will test Trump's negotiation skills and his relationship with Putin, which has raised concerns among traditional U.S. allies. Ukraine has agreed to a U.S.-proposed 30-day truce, and Trump seeks a similar commitment from Russia, though Putin has proposed conditions such as halting Ukraine's rearmament and suspending Western military aid. The outcome of this high-stakes call could significantly impact the war's resolution and U.S.-Russian relations.
Venezuela: Venezuela's state-run PDVSA has developed three operational scenarios to continue producing and exporting oil at its joint venture with Chevron once Chevron's U.S. license expires next month. The plan aims to maintain production levels of heavy crude at the Petropiar project, producing between 105,000 and 138,000 barrels per day, with some output sent to domestic refineries and other international markets. This is a development since the Trump administration did not renew Chevrons license less than a month ago. As the expiration approaches, Chevron must wind down its oil operations in Venezuela, leading to PDVSA's plans to continue production independently.
Sanction oil: A ship carrying Russian crude, the Panama-flagged Daban, unloaded at a Chinese port after transferring oil from three smaller tankers under U.S. sanctions. The Daban, a very large crude carrier (VLCC), discharged two million barrels. This is following a month-long voyage. Despite sanctions, China has continued to receive Russian oil, with some terminals, accepting shipments from non-sanctioned vessels. The three vessels came under U.S. Sanctions on January 10 and they unloaded into a larger carrier in Russian waters to finish the trip to China. It continues to show the demand for Russian crude despite the current Ukraine and Russian war.
Market Overview: Energy products are up again this week with a lot of headlines supporting the market short term. The headlines read as continued instability in the Middle East with Israeli air strikes in Gaza which killed at least 200 people. China is working on another stimulus plan. The U.S. strikes on Yemen's Houthis for their attacks on the Red Sea. The only headline that is bearish is that Trump and Russians President are meeting today to discuss ending the Ukraine war which could reprieve sanctions on Russia's crude which would increase more supply. With all the headlines out there, the market is being propped up as we head into the harvest season. Demand has continued to uptick the past two weeks as farmers fill to get ready to plant.
Crude chart
If we look into crude oil for the past 3 months, we can see that a lot of support is around the $70 crude mark. Utilizing the Fibonacci Retracement tool with the high on 1/15/2025 at $80.77 and the low set on 3/5/22 at $65.22 the tool will help take the data and show were minor and major support could possibly be. We overall are still calling the low support at 65.27 because that was more recent and the high of 73.68 because that was the next most recent high set on 2/11. The goal of showing this chart is to show that we continue to have a lot of minor support for the upside, but we have secured a stronger floor so downside will be more limited for the short-term outlook.
Right out of the gate crude futures hit a two-week high on worries Middle Eastin stability could reduce oil supplies, and hopes economic stimulus plans in China and Germany could boost demand for the fuel in two of the world's biggest economies. That was replaced around lunch time when the market reversed as U.S. President Donald Trump and Russian President Vladimir Putin discussed moves to end the three-year-old war in Ukraine, which could result in a possible easing of sanctions on Russian fuel exports. Putin agreed to Trump's proposal that Russia and Ukraine cease attacking each other's energy infrastructure for30 days. Even if the U.S. and Russia work out a ceasefire in Ukraine, some analysts said it will likely take a long while before Russian energy exports increase in a significant way. In addition to a possible boost to global oil supplies from Russia, economic worries related to Trump's trade tariffs also weighed on crude prices.
