Written Commentary
Global Ag News For May 21.2025
May 21, 2025
CRUDE OIL
April Crude Oil is lower this morning and is close to taking out yesterday’s lows. The trade is concerned that slower economic activity will lower global oil consumption. On top of that OPEC+ set to start lifting production quotas next month. The CEO of Canadian pipeline company Enbridge Inc. said yesterday that the tariffs on Canadian oil would need to be in place for years before significantly altering the amount of crude the US imports from that country. There is no easy way for the US to replace the approximately 4 million barrels per day of Canadian oil it imports. Approximately 90% of Canada’s crude oil exports go to the US. The decision by OPEC+ to start lifting the output restrictions may have been driven by record output from one of its members, Kazakhstan. Saudi Arabia may be getting frustrated with oversupply from Kazakhstan, Iraq, Russia and the UAE. In the past, similar situations have resulted in Saudi Arabia “opening the spigots,” which ultimately driving oil prices sharply lower. The problem is, the steep decline in prices have hurt the Saudi’s bottom line as well as the scofflaws. The API report yesterday was a bullish against expectations for crude oil but not enough to lift the market The report showed US crude oil stocks falling 1.46 million barrels last week versus trade expectations calling for a 300,000-barrel increase. Gasoline stocks fell 1.25 million barrels versus -400,000 expected and distillates rose 1.14 million versus +200,000 expected. The EIA report will be released this morning. Refinery runs are expected to be +0.2% to 86.7%.
Oil pump jacks at sunset sky background. Toned.
NATURAL GAS
April Natural Gas is higher this morning and is near the upper end of yesterday’s sharply higher move. In his speech last night President Trump touted a potential partnership with South Korea and Japan in developing a natural gas pipeline in Alaska. The pipeline may be years off, but in the meantime, increasing US LNG export capability pulls more supply from the US market. Japan’s trade minister plans to visit Washington this month to seek exemptions from Trump’s tariffs and discuss Japan’s plans to buy more US LNG. For this EIA report this week, the Reuters poll shows an average expectation for a net draw of 67 to 101 bcf for the week ending February 28. The five year average decline for the week is -97 bcf. As of last week supply was down 534 bcf from the previous year (-22.5%) and 10.5% below the five-year average. The weather forecasts show a mix of above normal temperatures in the eastern half to two-thirds of the lower 48 and below normal in the west.
PRODUCT MARKETS
API Gasoline stocks fell 1.25 million barrels last week versus expectations for -400,000 expected, but distillates rose 1.14 million versus +200,000 expected. The EIA report will be released this morning. April RBOB and ULSD are both under pressure this morning along with crude oil.
>Interested in more futures markets? Explore our Market Dashboards here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
