Commodities: Global
OPEC Oil Output Rose in February, a Reuters survey found, as Iranian exports held strong, despite renewed U.S. attempts to curb the flows, and Nigeria boosted output above its target within the wider OPEC+ group. OPEC pumped 26.7 million barrels per day (mbpd) last month, up 170,000 bpd from January’s revised total. Iran produced 3.2 mbpd of crude in January, according to S&P Global Commodity Insights, up from 2.5 mbpd in January 2022. Trump hit Iran with two waves of fresh sanctions in the first weeks of his second-term, targeting companies and the so-called shadow fleet of ageing oil tankers that sail without Western insurance and transport crude from sanctioned countries. In early March, his administration announced that the US may use military force to directly interdict against these tankers. The eight OPEC+ countries, which previously announced reductions in April and November 2023, agreed to proceed with a gradual and flexible return of the 2.2 mbpd voluntary adjustments starting on 1st April, 2025 until August 2026 (18 months), while remaining adaptable to evolving conditions.
China’s Crude Imports Fell -3.4% year over year to 10.4 mbpd in January-February versus a year ago of 10.7 mbpd. The new sanctions on Russian and Iranian crudes announced at the beginning of the year by Biden disrupted logistics, particularly in January. China’s crude oil imports were expected to rebound in March and April as OPEC+ loosens up its production.
The EIA Maintained Its Projection that the United States will produce 13.9 mbpd of oil in 2025, up from a record 13.2 mbpd in 2024 as December closed at just below the 2025 level. US operating oil rigs increased to 486 as of February 28th from 479 as of January 31st. Per AAA, US average regular unleaded gasoline prices per gallon ticked higher to $3.12 (+2¢) at the end of February with a lot of commentary that North American tariffs will drive energy prices higher. However, Canada is dependent on the US for most of its oil exports south to the Gulf of Mexico and even to supply eastern Canada from western Canada as there are no Canada-situated pipelines between those regions (such a pipeline was deemed hazardous to the environment and climate). Apart from the Trans Mountain pipeline to Canada’s west coast, Canada depends on the US to ship its crude, even for domestic refining. Meanwhile, Mexico is a net energy importer from the US, although it does supply some needed blending mixes. In fact, Mexican exports collapsed 44% year-on-year to only 500,000 bpd. In short, both countries depend on the US for daily fuel and economic operations. While undoubtedly all refiners will try to shift prices higher regardless, negotiations are still underway.
The Trump Administration said in early March that it was ending a license the US granted to Chevron since 2022 to operate in Venezuela and export its oil, putting 200,000 bpd of supply at risk, in order to apply pressure to the autocratic Maduro regime. Although small in volume, Gulf Coast refiners will look to alternative heavy crude oil such as Colombian, Guyanese or Ecuadorian for blending. Donald Trump also said that he wanted the Keystone XL Pipeline built and pledged easy regulatory approvals for the project. One may recall Biden revoked a key permit in 2021, halting the thirteen-year project. Given the hostility of the Labor party in Canada to Trump, oil and pipelines, revitalizing this project seems unlikely. US Interior Secretary Burgum implemented Trump’s overturning of Biden’s oil and gas lease ban, specifically on the Outer Continental Shelf. The DOI, also withdrew a June 2021 Biden administration order that halted oil and gas leasing in the Arctic National Wildlife Refuge and promised to expand natural gas infrastructure in the region in conjunction with Japan and South Korea.
America’s Farmers Boosted Acres of Corn to a five-year high while
reducing soybean sowings, the US Department of Agriculture in its first 2025 planting outlook. The USDA at its annual forum estimated corn acres rising to 94 million acres, up from 90.6 million in 2024. Soybeans were estimated at 84 million, down from 87.1 million a year ago. Meanwhile, inbound shipments of everything from avocados to coffee and sugar are expected to drive the US’ agriculture trade deficit to a record $49 billion this year. At the same time, America’s most widely grown crops have been losing overseas markets over the past decades.
Gold Was on a Tear as in mid-February, China allowed the top ten insurers to buy gold for the first time up to as much as 1% of their assets, or $27 billion. South Korea’s state-run mint suffered from a gold bar shortage and suspended sales for more than three weeks as a result. South
Korea joins several other countries with a persistent physical gold shortage driven by a strong influx of gold into the US as traders got ahead of any potential tariffs on gold (see graph right with silver also impacted); however, this has also reportedly been driven by a sudden spike in gold demand in South Korea by retail investors amid a rapid depreciation of the Korean won, as well as tariff-related uncertainty. Goldman Sachs raised its year-end gold target to $3,100 an ounce on central-bank buying and inflows into bullion-backed exchange-traded funds, highlighting Wall Street’s enthusiasm for the metal. China added to its official gold reserves for the fourth consecutive month in February, according to the latest PBoC release.
Finally, in terms of fun facts, the percentage of NBA Shots that are 3-pointers has increased from 4% in 1985 to a record 42% today. Teams now average 38 3-pointers a game, up from just 3 in 1985. Thank you Stephen Curry and the Golden State Warriors!
All the best in your investing!
David Burkart, CFA
Coloma Capital Futures®, LLC
www.colomacapllc.com
Special contributor to aiSource