Market Quote: Oil & Gas Prices, U.S. Fiscal Policy
Author: The editor's desk
February 20, 2025
A mid-week analysis of what’s happening in global financial markets from the perspective of AGF’s investment management team.
Settle Down
Crude oil prices seem to have settled after considerable volatility stemming from potential tariffs in recent weeks. Yet, despite still healthy demand, some concerns linger around potential new supply from Russia should the Russian-Ukraine conflict come to a resolution this year.
We believe this worry may be overblown for two primary reasons: First, Russia’s crude oil output only saw a modest decline following the implementation of sanctions and barrels were mostly re-routed to different buyers, which continue to buy Russian oil. Second, Russian crude output seems to follow a larger agreement with OPEC+ as opposed to being driven by artificial constraints from sanctions.
The main risk to energy markets in our view could be on the natural gas side of the equation, particularly as Russian gas exports into Europe have all dropped significantly since the beginning of the conflict. European gas prices remain quite strong, so a conflict resolution would present a greater risk to natural gas prices (primarily European and less so for North American), as opposed to crude oil.
Here We Go Again?
Most Republicans and many Democrats are bracing for fierce budget battles starting next month; a government shutdown is likely, in our opinion, in mid-March — perhaps extending for several weeks.
As for extending the 2017 tax cuts — or passing new tax reductions — that may not pass until the second half of 2025, as Democrats vow to slow down the Republican agenda.
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The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds, or investment strategies.
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Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. Our companies deliver excellence in investing in the public and private markets through three business lines: AGF Investments, AGF Capital Partners and AGF Private Wealth.
AGF brings a disciplined approach, focused on incorporating sound, responsible and sustainable corporate practices. The firm’s collective investment expertise, driven by its fundamental, quantitative and private investing capabilities, extends globally to a wide range of clients, from financial advisors and their clients to high-net worth and institutional investors including pension plans, corporate plans, sovereign wealth funds, endowments and foundations.
Headquartered in Toronto, Canada, AGF has investment operations and client servicing teams on the ground in North America and Europe. AGF serves more than 800,000 investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.
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