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March 3 -

By Liz Hampton, Editor-In-Charge, US Energy Markets

Hello Power Up readers!

Oil prices are steady to kick off the week ahead of U.S. President Donald Trump's tariff deadline and uncertainty over the Ukraine ceasefire. Global Brent futures were up 10 cents to $72.71 a barrel, while U.S. West Texas Intermediate futures were off 20 cents to $69.56 a barrel.

U.S. natural gas futures are up 2% amid record flows to liquefied natural gas $(LNG)$ export plants, and the expectation of higher demand over the next two weeks. The front-month Henry Hub contract was trading at $3.918 per million British thermal units (mmBtu).

U.S. oil output hits a new record

Trump's tariffs on Mexico and Canada are due to take effect at 12:01 a.m. on Tuesday. Trump said he would decide on Monday what level of tariff's he'd impose. For now, he's promised to implement a 25% tariff on imports from Canada and Mexico, with a 10% tariff on Canadian energy.

There has been some indication that Trump may not impose the full amount of tariffs. He is also expected to raise fentanyl-related tariffs on Chinese imports to 20% from 10% currently.

The threat of tariffs is already showing some signs of impacting Canadian drilling companies, Amanda Stephenson reports. Precision Drilling, the largest Canadian rig operator, said it has seen a steeper-than-expected slowdown in its Canadian well servicing segment.

TD Cowen, meanwhile, reduced its rig count forecast by about 5%.

Trump's planned tariffs have raised inflation worries at the U.S. Federal Reserve, analysts said, stoking fears the Fed could keep interest rates higher for longer. This would slow economic growth and energy demand.

Elsewhere, Kazakhstan raised crude oil and gas condensate production in February by 13% from the prior month, hitting a record of 2.12 million barrels per day. This exceeds its quota within the OPEC+ group of producers.

And in the United States, oil production hit a fresh record in December, the U.S. Energy Information Administration said on Friday in a monthly report. Crude output climbed to 13.491 million barrels per day, jumping from 13.314 million bpd the prior month.

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A consortium led by Exxon Mobil in Guyana had recovered $33.9 billion of $41.1 billion spent on the Stabroek offshore block in Guyana, the country's vice president told Reuters. That figure includes spending to explore more than 30 wells at the block, as well as the development of six oil and gas projects approved by the government.

The U.S. Environmental Protection Agency will delay an action for one year to expand sales of higher ethanol blends of gasoline in South Dakota and Ohio, two of eight states that had requested approval of increased sales of the product. This follows a decision by the agency to uphold an April 28 implementation date for the request from eight Midwest governors to allow year-round sales of gasoline containing 15% ethanol.

U.S. oil drillers added oil and gas rigs for a fifth week in a row last week, oilfield services firm Baker Hughes said on Friday. The rig count rose by one to 593, its highest since June. It is 6% below last year's level.

The British Energy Secretary will visit China in March to restart talks over energy cooperation and meet with investors, Reuters exclusively reported last week. This comes as the Labour government seeks closer ties with China as U.S.- and EU-China.

American Electric Power and transmission affiliate Transource Energy will invest some $1.7 billion in transmission system upgrades to improve reliability and meet growing demand, the company said in a release. AEP plans to invest across states in the regional transmission organization PJM Interconnection, such as Maryland, Ohio, Virginia and Indiana.

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(Editing by Mark Porter)