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The Energy Report

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


The Last, Last Chance. The Energy Report 10/26/2026

I got one foot on the gas, I got one foot in the grave, I’m in the kind of trouble from which I can’t be saved. I spend my night’s running or I’ll spend my days in chains, This is my last, last chance to get it right, right, right, So I won’t have to hear my mama cry, cry, cry., I stumble through the darkness just trying to find a light This is my last, last chance to get it right.

Oil prices are giving back a big chunk of Friday’s gains as President Trump is going to give Iran a last, last chance to come to a deal. President Trump held off on any attack over the weekend and another round of talks with Iran kicked into gear to try to defuse tensions. Of course, many believe these talks will be fruitless is only delaying the inevitable while the trump administration ramps up its military capabilities around the Persian Gulf.

WTI is trading near $101 after being down roughly 1.7–2% in early action, while Brent sits around $114–$115—off the near six-month highs hit late last week when Houthi strikes on Saudi infrastructure and war fears pushed both benchmarks higher (Brent up about 6% on the week, WTI up 2.3%). President Trump had previously ruled out new attacks before the November 3 midterms and cited “productive discussions,” yet he has also floated the choice between a deal and finishing the Iranian regime off.

Over the weekend, Qatari mediators headed to Tehran as part of coordinated de-escalation efforts, and senior officials from the Mecca Pact countries (Saudi Arabia, Turkey, and Pakistan) were set for high-level meetings in Tehran.

That diplomatic activity helped cool the Friday rally, even as Houthi attacks on Saudi targets continued. At the same time, fresh reporting says the U.S. is fully positioned for major action. Reports say that t U.S. forces in the Middle East are prepared to launch new, potentially major military operations against Iran “within 96 hours of receiving” an order from Trump, with sufficient forces already deployed. Officials describe it as a “big effort” that would go beyond limited “mow the lawn” strikes—targeting energy infrastructure, military sites, and nuclear facilities.

Many sources say it is a question of when, not if, with most expecting any large-scale move after the midterms, though the timing remains in question n as his is the Iranian regime’s last real chance at a deal before the military hits them hard. Plenty of traders and analysts are still wondering whether something could still happen before Election Day if talks stall. On the product side, gasoline prices have surged across the Midwest on a refinery outage. ExxonMobil’s Joliet, Illinois, refinery (roughly 275,000 barrels per day) took its 50,000-barrel-per-day catalytic reformer offline around October 20 after decreased stack activity and elevated flaring. The unit produces critical octane blendstock. So if you’re in the Midwest and you saw your premium gasoline prices spike that is the reason at some stations in Wisconsin they were charging over $6 a gallon for premium.

Yet while this is a problem the Energy Information Adminstrations explains the green energy madness by saying that “While refinery utilization was the highest since 1998, total U.S. refinery output was only the highest since 2019 because refining capacity has decreased by 4% since then.” Gee I wonder why? With Midwest gasoline inventories already at a record low for this time of year and national gasoline stocks drawing, the disruption hit hard. Chicago-area bulk prices jumped sharply, and retail averages rose quickly in Michigan (into the mid-$4s), Ohio, Illinois, Wisconsin, and Indiana—exactly the kind of regional tightness that shows up at the pump even when crude is not the main driver. The combination leaves the market in classic war-premium mode: downside limited by the strike readiness and ongoing regional attacks, but quick to sell any headline that suggests diplomacy is working. Crack spreads remain a separate story, with refining constraints (including this Joliet issue) supporting product prices relative to crude. Volatility stays elevated, and risks are still skewed to the upside if the 96-hour clock starts or if talks break down. Stay tuned to the Fox Business Network for the latest on that.

Big news in Venezula as the Wall Street Journal repoted that Venezuelan opposition leader María Corina Machado returned home Sunday after nearly 11 months in exile, putting new pressure on the U.S.-backed interim government and potentially complicating the Trump administration’s efforts to manage a gradual political transition.

“I am here. With you,” Machado posted on X on Sunday morning. In a video posted by her party, Machado was welcomed by a crowd of supporters at the Sanctuary of the Divine Shepherdess in the city of Barquisimeto in central Venezuela. Her arrival comes as President Trump has increasingly embraced interim President Delcy Rodríguez as a partner in securing lucrative oil deals and courting billions of dollars in investment.

As she neared Caracas on her triumphant journey home Sunday night, tens of thousands of Venezuelans shouting “Maria!” and “Libertad!” crowded the highway. Cars and trucks tooted their horns as her vehicle moved at a snail’s pace through the multitudes with Machado waving from the roof. “Our freedom has arrived,” said one woman joyfully to a television reporter outside the capital city. A Must Read in the Journal. An oil spill from a damaged tanker off the UAE coast has widened, with Copernicus satellite images from Oct. 24 showing it spreading closer to the northern Umm Al Quwain shoreline and triggering more beach closures, Reuters reported.

UAE officials confirmed the tanker leak is hitting beaches there and have shut all of them while cleanup teams work, and the spill has also led to precautionary closures in Sharjah and Ras Al Khaimah. Analysts link it to the Gem No.2, which was hit by a projectile around Oct. 9, and while authorities say the fuel smells pose no health risk.

November natural gas is getting walloped, trading near $2.52–$2.53 this morning, down roughly 11–12 cents (about 4%) from Friday’s $2.640 settlement and well below the late-summer lows. Fox Weather’s temperature outlook is the main driver. Their forecast shows the U.S. staying warmer than normal into early November, especially across the East and Midwest. That is cutting into normal early-season heating demand and keeping the nearby contract under pressure.

Commodity Weather Group and other models are saying the same thing — above-normal temperatures through roughly November 3–5 — so the market is trading the lack of heating load rather than any winter risk.

Fox Weather is also highlighting that U.S. supply and demand are moving in different directions. Supply is strong: production is near record levels (winter projections around 112.5 Bcf/d) and storage was 3,644 Bcf as of October 16 — about 35 Bcf above the five-year average. Demand, however, is soft near-term because of the mild temperatures. LNG exports are still providing some support, but they are not enough to offset the weather-driven drop in heating needs. The result is ample supply meeting delayed demand — a classic bearish setup for the prompt month. The winter strip is holding up better than November, but the warm outlook is still in control. Speculators remain heavily short, so a colder turn in the models could spark a bounce. For now, Fox Weather’s mild temperature outlook and the supply-demand divergence are keeping the sellers in charge so download the Fox Weather ap to monitor for changes.

In Europe, it’s a different story. John Kemp Energy Reports that European gas storage levels are flattening as temperatures fall, challenging expectations for a late-season inventory build before winter. The tightening outlook has pushed prices above €95 per megawatt-hour. Total EU and UK gas stocks increased by less than 3 terawatt-hours during the seven days ending October 24. The net injection was not significantly higher than in 2025 or 2024, even though inflation-adjusted prices were already at their highest level in nearly four years. Stocks remain 170 TWh below the ten-year seasonal average—a 17% shortfall, or 2.15 standard deviations below normal. This persistent storage deficit is adding further upward pressure on futures prices, helping curb demand while attracting additional LNG imports.

Download the box weather app stay tuned to the Fox Business Network Call today for my wildly popular trade levels or to open an account at 888-264-5665 or pflynn@pricegroup.com.



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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.

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