Written Commentary
Global Ag News For May 21.2025
May 21, 2025
CRUDE OIL
June Crude Oil is moderately higher this morning, but it has also traded to its highest level in over a week in the wake of new sanctions against a Chinese oil refinery that it accused of purchasing more than $1 billion worth of Iranian crude. This ups the ante in the trade dispute with China, but it also shows the US’ willingness to push hard to interrupt the shipment of Iranian oil, even as it pursues talks with Iran over their nuclear program. Chinese state-run refiners have avoided buying Iranian crude in the wake of the US sanctions, but smaller, independent refineries (the “teapots”) have not. This is the second teapot that has been hit with sanctions. Russian Foreign Ministry spokeswoman Maria Zakharova said today that Estonia’s detention last week of a Russia-bound oil tanker was a provocative action that posed risks to shipping and security in the Baltic Sea and that Russia would react proportionately to instances of aggression against its vessels. The ship has been under EU sanctions since February as part of Russia’s “shadow fleet” that it uses to circumvent international sanctions. The weekly EIA stocks report yesterday came in neutral against expectations for crude oil and slightly bullish against expectations for gasoline and diesel. US crude oil exports saw a large increase last week, and imports fell slightly, leading to a substantial decline in net imports to their second lowest level since 2020.
NATURAL GAS
June Natural Gas is testing support at this week’s low and the 200-day moving average. The 6-10 and 8-14 day maps are looking warmer than they were yesterday at this time. They have eliminated all the below-normal forecasts and now show mostly above normal temperatures across the lower 48 states, with the exception of near-normal on the west coast, the PNW and across the northern Rockies and northern Plains. For the EIA storage report this morning, the Reuters poll as an average expectation for US natural gas storage to show a net injection of 22 bcf last week, with a range of expectations from +13 to +33. The five year average for the week is +62 bcf. As of last week, storage was -19.8% from a year ago and -2.1% below the five-year average.
PRODUCT MARKETS
The product markets are higher this morning in line with crude oil, as they react to the latest sanctions regarding shipments of Iranian crude oil. The weekly EIA stocks report yesterday came in slightly bullish against expectations for gasoline and diesel, with gasoline stocks -2.0 million barrels versus -1.6 million expected and distillate stocks -1.9 million barrels vs -1.2 million expected. Gasoline stocks at 234.0 million bales are up from 227.3 million a year ago but below the five-year average of 236.1 million. Distillate stocks at 109.2 million are below 115.0 million a year ago and below the five-year average of 121.7 million.
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