Tariffs & Timelines
- Tariff talk whipsaws continue
- Analysts think July 9th tariff deadline is soft
- Tariff impacts only now starting to come into focus
- Nat gas pipeline expansion talks revive
Sincerely,
David Thompson, CMT
Executive Vice President
Powerhouse
(202) 333-5380
The Matrix
With all the drama and rapid-fire action of a no-limit Texas hold ’em poker game, Canada and the US pushed trade negotiations to the brink on Friday. President Trump threatened to call off talks because Canada was set to impose a digital services tax that would affect U.S. companies. Late on Sunday, Canada folded their cards and scrapped plans to implement the tax and both sides announced the resumption of negotiations aimed at reaching a new deal by July 21st.
Prior to that deadline is the July 9th expiration of the 90-day tariff pause for most other nations that trade with the United States. If that wasn’t enough, negotiations will refocus on China in August — pending anymore unforeseen whirlwind developments.
One major bank believes the Administration, citing at least some progress, will roll forward the July 9th deadline. This gives the scores of on-going bilateral deals more time to progress. It will also be important to assess each ‘deal’. The recent US-UK framework agreement is likely a good example of what to expect. It is narrow in scope and is not a full-fledged trade agreement given that it was enacted by executive order rather than an act of Congress. The bank notes that comprehensive trade agreements typically require three years of talks.
Tariffs may well remain in place for some time. A rebound in what is known as ‘soft’ data such as consumer sentiment may give the perception of less economic risk from tariffs. The S&P 500 stock index has rallied back to pre-Liberation Day levels and US 10-year Treasury yields have stayed in the 4.00 – 4.50% range also supporting that point of view.
Assessing tariffs impact on the ‘hard’ economic data requires more time. The legal application of tariffs only started on April 9th for goods that were not already in transit. US imports may not be fully tariffed until June. This time lag means US companies have yet to determine how much tariff expense to pass along to US consumers.
Fuel consumers (both retail and commercial) are now well-attuned to this economic uncertainty. This environment is an opportunity for fuel marketers to initiate conversations about price protection.
Supply/Demand Balances
Supply/demand data in the United States for the week ended June 20, 2025, were released by the Energy Information Administration.
Total commercial stocks of petroleum decreased (⬇) 4.2 million barrels to 1.2307 billion barrels during the week ended June 20th, 2025.
Commercial crude oil supplies in the United States were lower (⬇) by 5.8 million barrels from the previous report week to 415.1 million barrels.
Crude oil inventory changes by PAD District:
PADD 1: Down (⬇) 0.2 million barrels to 9.1 million barrels
PADD 2: Down (⬇) 0.6 million barrels to 102.3 million barrels
PADD 3: Down (⬇) 5.0 million barrels to 229.9 million barrels
PADD 4: Unchanged (=) at 23.8 million barrels
PADD 5: Down (⬇) 0.1 million barrels to 50.0 million barrels
Cushing, Oklahoma, inventories were down (⬇) 0.5 million barrels to 22.2 million barrels.
Domestic crude oil production increased (⬆) 4,000 barrels per day from the previous report at 13.435 million barrels per day.
Crude oil imports averaged 5.944 million barrels per day, a daily increase (⬆) of 439,000 barrels. Exports decreased (⬇) 91,000 barrels daily to 4.270 million barrels per day.
Refineries used 94.7% of capacity; an increase (⬆) of 1.1% from the previous report week.
Crude oil inputs to refineries increased (⬆) 125,000 barrels daily; there were 16.862 million barrels per day of crude oil run to facilities. Gross inputs, which include blending stocks, increased (⬆) 52,000 barrels daily to 17.199 million barrels daily.
Total petroleum product inventories increased (⬆) by 1.6 million barrels from the previous report week, up to 815.6 million barrels.
Total product demand increased (⬆) 122,000 barrels daily to 20.513 million barrels per day.
Gasoline stocks decreased (⬇) 2.1 million barrels from the previous report week; total stocks are 227.9 million barrels.
Demand for gasoline increased (⬆) 389,000 barrels per day to 9.688 million barrels per day.
Distillate fuel oil stocks decreased (⬇) 4.1 million barrels from the previous report week; distillate stocks are at 105.3 million barrels. EIA reported national distillate demand at 3.794 million barrels per day during the report week, an increase (⬆) of 48,000 barrels daily.
Propane stocks rose (⬆) 5.1 million barrels from the previous report to 72.6 million barrels. The report estimated current demand at 305,000 barrels per day, a decrease (⬇) of 521,000 barrels daily from the previous report week.
Natural Gas
As summer temperatures heat up so is talk on reviving natural gas pipeline projects into New England and the Mid-Atlantic states. Williams Companies, Boardwalk Pipeline, DT Midstream and EQT have all proposed building or expanding pipelines into the East
Coast. One analyst forecasts up to 5 bcf/d of new demand by 2030 if the new pipes are built and demand expectations hold.
Williams has previously begun restarting discussion around the NESE and Constitution projects. Now, DT Midstream plans to seek binding commitments for the expansion of the Millennium pipeline and EQT seeks to extend the Mountain Valley pipeline into North Carolina.
According to the EIA:
- Net injections into storage totaled 96 Bcf for the week ended June 20, compared with the five-year (2020–24) average net injections of 79 Bcf and last year’s net injections of 59 Bcf during the same week. Working natural gas stocks totaled 2,898 Bcf, which is 179 Bcf (7%) more than the five-year average and 196 Bcf (6%) lower than last year at this time.
- According to The Desk survey of natural gas analysts, estimates of the weekly net change to working natural gas stocks ranged from net injections of 80 Bcf to 102 Bcf, with a median estimate of 88 Bcf.
- The average rate of injections into storage is 28% higher than the five-year average so far in the refill season (April through October). If the rate of injections into storage matched the five-year average of 7.8 Bcf/d for the remainder of the refill season, the total inventory would be 3,932 Bcf on October 31, which is 179 Bcf higher than the five-year average of 3,753 Bcf for that time of year.
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