President Trump has a vision of peace through strength, but he takes it a step further because he also wants to use dollars. President Trump has warned Russia that tough sanctions are coming if they fail to get a peace deal with Ukraine as he put on sanctions on India for continuing to buy Russian oil. That is peace through strength. But he also is dangling dollars to try to achieve peace.
The Wall Street Journal reported yesterday that and have discussed resuming work on the Sakhalin project if governments approve it as part of a Ukraine peace deal. Exxon executives have asked the U.S. government for support if the company returns to Russia and has received a sympathetic hearing. Resuming business would be a major shift after Exxon’s exit from Russia post-invasion but depends on peace talks and sanctions.
Once again President Trump is reminding Russia that it might be a lot better to try to work with the United States from an economic viewpoint as opposed to trying to get caught in a never-ending quagmire where they continue to lose a lot of soldiers and fail to gain ground. Now many people think that Vladimir Putin is a person that will never quit until he gets what he wants but if there is any chance of Vladimir Putin stopping this war, it may be the economy and dollars that stops his military ambitions.
Let’s be clear—President Trump is playing hardball with Russia, and he’s making it clear that there’s a choice to be made. Work with the U.S. and reap the benefits or get bogged down in a costly war that drains resources and delivers little in return. While many believe Vladimir Putin won’t back down until he gets his way, history shows that economic pressure and the almighty dollar can achieve what armies cannot. If there’s any shot at ending this conflict, it may not come from the battlefield, but from Russia’s bottom line. That’s what’s at stake.
President Trump isn’t backing down, especially when it comes to India—one of the biggest winners in the great Russian oil shuffle. According to Reuters, India has pocketed a jaw-dropping $17 billion by scooping up discounted Russian crude. But here’s the kicker: Trump’s fresh tariffs, which could go as high as 50%, threaten to slice a massive $37 billion off Indian exports headed for U.S. shores. That’s no small potatoes. And we’re talking real hits to labor-heavy industries—think textiles, gems, and jewelry—with thousands of jobs hanging in the balance.
Now, India isn’t giving up without a fight. Sources say they’re open to buying more U.S. energy, but don’t want to be told that they can’t buy Russian oil. We’ll just have to stay tuned and see how this all plays out India’s going to have to balance the savings and oil with the potential hit to their economy if sanctions land.
This comes as Donald Trump makes a bold prediction that oil prices could fall below $60.00 a barrel soon. Oil traders should not bet against President Trump’s oil price predictions because let’s face it he’s been fairly accurate. The Trump administration wants to fill up the Strategic Petroleum Reserve, and perhaps he is hoping for lower prices to achieve that goal.
But let’s not get ahead of ourselves—sure, oil below $60 sounds great if you’re filling up your tank or the SPR, but what does it mean for the U.S. patch? Well, the cracks are already showing. The big guns in shale are running out of top-tier acreage, and the wells? They’re getting gassier by the day. Technology, once the magic bullet, has pretty much maxed out. DUCs—drilled but uncompleted wells—are dwindling, and the frack spread count isn’t exactly lighting up the sky either. And it’s not just talk—Tracy Shuchart (CHI) points out that shale output may have reached its peak and is starting to trail off. The Energy Information Administration data is backing her up. So, while the White House might be cheering for bargain barrels, America’s oil producers are feeling the squeeze.
Oil market data brought positive jolt last night before it faded after the reported that crude inventories dropped by 974,000 barrels—just shy of expectations of a 1.7-million-barrel decline. Gasoline supplies also fell, down by 2.06 million barrels, while distillate stocks slipped by 1.488 million barrels. Even Cushing saw a decrease of 497,000 barrels. These shifts highlight ongoing demand strength and add a touch of optimism to the energy sector outlook.
While the market has been focusing a lot on Russia, Iran’s oil may be slipping through the cracks. NIOC stated Monday that Iran’s crude output in late August hit its highest level since sanctions were reimposed 7½ years ago. And yet there’s still a lot of concern about the political stability of the Ayatollah in Iran as we reported early or uncharacteristically, we heard some criticism from military leaders of the ayatollahs policies.
I think overall if you look at the inventories that demand for oil is good globally inventories are still very tight and in some case below the 10 year average so we still think that the downside is fairly limited even though President Trump’s proclamation that oil prices could go below 60 good caused some speculation hmm.
What Happened to Summer? That is what Natural Gas Traders want to know. Let me break it down for you. Analytics is waving some red flags for . They say this is shaping up to be the coolest August-September stretch since 2009, and it’s putting a real damper on the natural gas trade. Forecasts are bearish as near-term outlooks just shed a whopping 44 cooling degree days since August 15th. That means August-September could end up 86 CDDs below the 10-year average. Not exactly beach weather, and the market’s feeling it.
Now, EBW points out that while Thursday’s EIA report might show storage surpluses at an 11-week low, don’t pop the champagne yet—excess inventories could fly back above 200 billion cubic feet heading into September. On the other hand, LNG demand is picking up and supply is starting to tighten. Marcellus producers are even throttling back as regional spot prices drop to $1.50 per MMBtu. That’s so low, it might just shake the bears out and give us an opening for a rebound. Still, EBW cautions that as we move into late September, those storage surpluses could dominate the landscape. If the weather turns normal in October, surpluses could shrink faster than you think. But don’t count out another round of bearish weather—it’s still in the cards.
Fox Weather says that Labor Day weekend will offer a mixed bag of weather for the country, with an ongoing cooldown for millions and a little rain here and there. Mostly, however, there is a pleasant forecast as Americans celebrate summer’s last big weekend. The FOX Forecast Center has pegged a few cities as “winners” for the holiday weekend and some “losers.” Take the negative title with a grain of salt. Overall, a few showers and cooler temperatures won’t ruin the weekend.