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The Energy Report

Phil Flynn
http://www.pricegroup.com/
pflynn@pricegroup.com


What Americans Care About. The Energy Report 06/18/2026

When it comes to being an energy analyst the question I get more than any other from my friends is ‘when are my gas prices come down?” Well today I am happy to report that today’s AAA National Average for regular unleaded fell below $400 a gallon hitting $3.9990 a gallon and are going to continue to trend down.

This come as oil prices are falling after President Donald Trump formally agreed an interim peace deal with Iran, and says that “oil down, stocks up” – with hand motions.

That will put the focus on of the Strait of Hormuz and the 60-day negotiating period over Tehran’s nuclear program and a reopening of the Strait of Hormuz where already we have reports of fully loaded tankers of oil making their way through the chokepoint. Signal Group data cited by Bloomberg indicates that nearly three dozen supertankers carrying about 62 million barrels of crude are expected to reach Asia within weeks of the Strait’s reopening.

That should be good news for Fed Chair Kevin Warsh! Mr. Warsh who in his inaugural press conference as the new Fed head took a tough stance on Inflation said that “If I saw somebody in the grocery store, what I would say to them is that we cannot have a very significant effect on prices. The price of oil in the markets today or even the price of a dozen eggs… does not have first order consequences to what we’re doing

Try saying that that to my friends that are complaining about gas prices. Good luck

He went on to say that “. But we do have a really important job there and it’s to make sure that those changes in oil or beef or eggs or milk don’t broaden in the economy — don’t have second and third-order effects. That’s our job. That’s our commitment. That’s our capability and we’re going to deliver on it.”

In other words, while he is concerned about these price spikes that can influence short term inflation figures yet he has to focus on the whole picture which at times excludes short term spikes in food and energy and focus on real cause of inflation which is the government spending too much money. After the Fed meeting and press conference the market quickly priced in a September rate hike and one in the first quarter of 2027. Yet that might not happen. While Warsh signaled, he is tough on inflation its possible inflation has peaked. Yes, the CPI was hot at 4.2% YoY in May – But the real culprit was oil not sticky Inflation.

That’s why the sharp drop in oil prices is so important. WTI and Brent have plunged (WTI now hovering around $76-77, down over 4% in a session and roughly 30% from recent highs) as markets price in progress on a U.S.-Iran framework deal. The potential reopening of the Strait of Hormuz removes the big risk premium that had been baked into crude from disrupted ~20% of global oil flows. And while some say full normalization may take weeks – insurance, repairs, sanctions relief – but the direction is clear and as we have found out that the more pessimistic timeline have been proven to be too pessimistic. In other words, the inflation peak may already be in. Lower crude should feed through to softer headline CPI prints ahead, giving policymakers like Warsh more room to pivot toward growth-friendly moves. Energy markets are healing, and that’s bullish for the broader economy.

And from a larger sense if we see a world with new peace initiatives in the Middle East a nuclear free Iran with a pledge to stop supporting terror and war, the peace dividend is going to be transformative. In fact, The International Energy Agency, a Paris-based group of energy-consuming countries, warned Wednesday that a lasting resolution to the conflict could trigger an oil-supply overhang next year. Global supply is expected to surge by around 8 million barrels a day in 2027, the IEA said, heavily outpacing a 2 million barrels a day recovery in global oil demand according to the Wal Street Journal. Something the oil market was pricing in almost the whole time in a vote of confidence in the Us Military and US Leadership.

Back here, Nat gas is still a slave to the weather forecasts and massive production and record exports. Despite strong underlying fundamentals from rising power demand and booming LNG shipments, the market remains range-bound around the $3 level as traders digest another healthy storage build and tempered summer cooling expectations in the near term.

on: Henry Hub spot prices have been hovering near $3.00–$3.15/MMBtu recently, with July futures trading around $3.05–$3.16. We’ve seen some volatility on shifting weather models, but overall, the market is balancing robust supply against steady demand growth.

U.S. dry natural gas production continues to set records. Preliminary data shows output on track for a new annual high in 2026, with marketed production averaging around 107–111 Bcf/d and climbing. EIA forecasts dry gas production rising 3.3% in 2026 to about 111 Bcf/d (up from 2025 records), driven heavily by associated gas from oil plays like Permian. Monthly records keep falling — we’re seeing strong growth year-over-year.

Exports are in record territory here too. U.S. LNG exports are surging toward new highs, with forecasts calling for 17.2 Bcf/d in 2026 (up significantly) and even higher into 2027. Pipeline exports to Mexico are also robust (up ~15% YTD). Global demand, especially from Europe and Asia, keeps terminals running near capacity despite any short-term shoulder-season dips.

Today we get the latest EIA report that showed solid +108 Bcf build last week (above expectations and the 5-year average), pushing inventories further into surplus territory. This helps cushion against any weather-driven demand spikes but also caps upside for now.

Still, you need to download the Fox Weather ap as summer heat is the big wildcard for nat gas . Near-term (next 7–10 days), demand looks low to moderate with comfortable temps across much of the northern and eastern U.S. (highs 60s–80s with some showers), though the West stays warm to hot (80s–100s). Longer range, forecasts point to above-normal temperatures building, especially in the Plains, Rockies, and parts of the West/Midwest — classic summer cooling demand that should support power-sector gas use.

Overall, hotter-than-average summer patterns (per CPC/NOAA outlooks) could provide a lift if heat domes expand, but the massive production machine and record exports mean any rally needs sustained heat or a storage surprise to stick. Watch for Fox Weather updates and weather model shifts because this market can turn fast on a hot streak.

Also make sure you stay tuned to the Fox Business Channel because they are the only network that is invested in you! Also make sure you get my special reports by calling me at 888-264-5665 or by emailing me at pflynn@pricegroup.com



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Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. PFGBEST, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Phil is one of the world's leading energy market analysts, providing individual investors, professional traders and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline and energy markets. Phil's market commentary, fundamental and technical analysis, and long-term forecasts are sought by industry executives, investors and media worldwide.

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Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Contact Phil at 1-888-264-5665 or pflynn@pricegroup.com.