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The Energy Report

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


Crazy For You. The Energy Report 06/02/2026

The crazy moves in oil keep coming as President Trump calls Israeli Prime Minster Benjiman Netanyahu crazy along with some other colorful language as the war watch shifted from the Iran and the Strait of Hormuz to Lebanon where Israeli let their army go crazy over the weekend. According to an Axios report a heated call between Trump and Netanyahu where Trump is said to have told Netanyahu “you’re [f-ing] crazy’” while demanding Lebanon truce saying that “I’m saving your ‘ well backside you could say though the president was blunter using the world for the Democratic symbol. Trump told Netanyahu that the “shooting will stop” in Lebanon Thaen the President posted that the Iran talks back on “at rapid pace” the Lebanese presidency confirms Hezbollah agreed to US ceasefire proposal.

President Trump on Truth Social had a slightly different version saying that “had a conversation with Bibi Netanyahu today, asking him not to go into a major raid of Beirut, Lebanon. He turned his Troops around. Thank you Bibi! I also had a conversation with Representatives of the Leaders of Hezbollah, and they agreed to stop shooting at Israel, and its soldiers. Likewise, Israel agreed to stop shooting at them. Let’s see how long that lasts — Hopefully it will be for ETERNITY! President DONALD J. TRUMP

Oil that was flying on reports that Isra move was a violation of the ceasefire and reports that Iran would start attacking the Bab El-Mandeb strait caused a surge but now we are seeing easing. The President also offered from sage advice to those that are in panic mode to “Just sit back and relax, it will all work out well in the end – it always does!”

Those working against the current peace efforts are indeed finding support from hardline factions within Iran that prioritize ideological confrontation over diplomatic resolution. A prominent example is the reported tension involving Iranian President Masoud Pezeshkian (often referred to as a reformist-leaning figure elected in 2024), who allegedly offered his resignation due to the Islamic Revolutionary Guard Corps (IRGC) refusing to align with his push for peace proposals. , Pezeshkian reportedly submitted a resignation letter to the office of Supreme Leader Mojtaba Khamenei (who succeeded his father, the late Ali Khamenei).

According to sources cited by Iran International and picked up by outlets like Fox News, Times of India, and others: Pezeshkian claimed his administration had been sidelined from major decision-making, especially on national security and foreign policy. He accused hardline IRGC factions of effectively taking control amid the ongoing war fallout, fragile ceasefire, and negotiations. He argued he could no longer fulfill his legal responsibilities under these conditions. Iranian state media, the president’s office, and government spokespeople have strongly denied this. Yet it will all work out in the end it always does.

It is working out in Venezuela as well as Reuters reports that Venezuela’s oil ‌exports rose slightly to 1.25 million barrels per day in May, its third consecutive month of increase, fueled by more cargoes to the U.S., India and Europe, shipping data showed on Monday.

Though many are calling for elections interim President Delcy Rodríguez, can’t be trusted. While she has U.S. backing for now, but her government faces legitimacy questions. Many in the opposition (including figures like Edmundo González and María Corina Machado) are pushing hard for new presidential elections, arguing her term as acting president has expired or that she can’t be trusted to oversee a fair transition due to her deep ties to the previous regime. Rodríguez has said she supports “free and fair” elections in principle, but no firm date has been set. Critics see this as the Chavista establishment clinging to power with U.S. while prioritizing economic stabilization over democracy.

Still while the market has real concerns about tensions about massive oil market disruptions, the broader oil market is sending clear signals that the situation is manageable and likely temporary. The futures curve tells much of the story. The oil market is in significant backwardation, with near-term prices at a premium due to immediate concerns. However, the back end of the curve remains far more stable and lower. Traders are pricing in that current tightness from Hormuz-related shut-ins will ease over time, with longer-dated contracts reflecting expectations of restored flows and ample future supply. This structure has historically marked periods where markets anticipate disruptions as short-lived rather than structural crises.

Despite worries about production shut-ins and the Hormuz chokepoint, U.S. record exports are helping keep global markets well supplied. U.S. crude exports have surged to record levels around 5+ million barrels per day recently, filling gaps left by disrupted Gulf flows.

Workarounds are emerging too. Pipelines bypassing the strait, such as routes across Saudi Arabia and the UAE, are rerouting significant volumes. While global inventories are below average and drawing down (as warned by the IEA and major oil companies), high production elsewhere—particularly the ramp-up in U.S. output under the current administration—provides a buffer.

Yes, there are legitimate concerns on one side: potential for prolonged Hormuz issues, emergency stockpile draws, and warnings from the IEA about inventory depletion. But optimism is warranted on the other: strong U.S. production growth, record exports maintaining supply, pipeline alternatives, and effective management of global flows.

As President Trump has said, “it’s going to work out, it always does.” The combination of American energy strength and pragmatic administration policies positions the market to navigate this without descending into sustained panic. Oil prices are already well off their recent highs, reflecting these balancing forces. Stay level-headed—the data supports resilience over alarm. Get ready to take advantage of the swings and if you think the market is wrong than paly the option on the back end and if you are right, you should be rewarded Traders will also closely monitor the supply data from both the API and the EIA, where we expect draws of approximately 3 million barrels in crude, 3 million barrels in gasoline, and 3 million barrels in distillates, along with refinery runs increasing by 0.5 million barrels per day. We will also examine demand figures to assess how consumption fared over the holiday period, as well as the ongoing resilience of U.S. production and any updates from the ceasefire talks.

Is natural gas getting comfortable above $3 bucks? It might as weather and production and LNG exports are key. Natural gas futures are trading near $3.19–$3.21/MMBtu this morning (July contract), showing some comfort trading in the low-to-mid $3 range after pushing toward a 3-month high near $3.29 recently. $3? It looks like it might be finding a floor there. After a volatile spring, the market is balancing weather-driven cooling demand, steady production growth, strong LNG exports, and healthy storage builds.

Fox weather has reported that early summer heat is starting to build across parts of the U.S., particularly in the northern two-thirds of the country. Forecasts for above-normal temperatures through mid-June support power demand for air conditioning, which helps offset milder shoulder-season patterns. This is a classic summer setup where cooling loads can provide a bid under prices.

As far as production U.S. dry gas production remains robust, with Lower 48 output averaging around 109–110 Bcf/d recently. The EIA projects continued growth into 2026, driven heavily by associated gas in the Permian and gains in the Haynesville/Gulf Coast. This keeps the supply picture ample but not overwhelmingly bearish given demand tailwinds.

LNG Export is the big structural bull factor as U.S. LNG feedgas and exports have been hitting records (near 18+ Bcf/d in recent months), with new capacity additions like Golden Pass Train 1 coming online. EIA forecasts average LNG exports around 17.0 Bcf/d for 2026. Global demand, especially from Europe and Asia, continues to pull U.S. gas, tightening the domestic balance over time. Storage is being built nicely as the latest EIA report showed a +92 Bcf injection, leaving inventories slightly above year-ago and 5-year averages. This provides a buffer, but the combination of rising LNG and summer power demand could keep the market from getting too comfortable on the downside. But Nat gas appears to be stabilizing above the psychological $3 level as seasonal demand ramps up and export pull remains strong. Volatility will continue with weather swings, but the longer-term fundamentals (LNG + power) suggest a higher floor than we’ve seen in recent years. Traders should watch storage injections, heat forecasts, and any maintenance-related LNG flow changes. According to FOX Weather and broader forecasts, we’re seeing building heat across the U.S. this week, with above-average temperatures expected to boost cooling demand and support nat gas use for power generation. Scattered severe storms and flash flood risks remain in the Plains and South, but the overall warmer pattern is constructive for energy demand heading into summer. Keep an eye on that ridge of high pressure — it could be the spark that keeps prices comfortable above $3.

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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.

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