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The Energy Report

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


The Problem with Houthis. The Energy Report 10/14/2026

Energy markets face another Whipsaw Wednesday as Houthi rebels stir fresh turmoil. Oil surged overnight on reports that Iran-backed Houthi rebels struck the headquarters of Saudi Aramco in Dhahran. Sources told Reuters and Bloomberg and Fox Business that the attack damaged multiple floors of an office tower (including areas near the CEO’s office), with a fire spreading between the sixth and tenth floors. The Saudi energy ministry described it as a limited fire with no casualties or injuries. Operations continued, employees were shifted to remote work in some cases, and there was no impact on oil production or flows.

Still, the Houthis vowed more attacks on airports, oil facilities, and Aramco sites, and the strike put a fresh war premium back into the market. Traders are wondering whether it’s Saudi Arabia and their military can stop the attacks and put the hoolies out of their misery.d And with this news you have to watch the diesel and gasoline crack spreads reacted higher as the risk premium returned . Diesel remains the tightest part of the barrel amid lean global inventories, Russian export constraints, and strong demand. European diesel cracks have traded above $100/bbl in places this week (unprecedented levels per Argus), while U.S. diesel cracks stay elevated near or above $100 in spots. The 3-2-1 crack is still historically strong in the $60s range even after some pullback. Adding potential diesel barrels into the market is being debated, but the world needs every barrel it can get right now.

Talk of an energy ceasefire between Russia and Ukraine continues. President Trump announced an “energy ceasefire” effective immediately, with both sides supposedly agreeing to stop striking energy infrastructure. Ukraine has expressed support in principle if mutual and with guarantees, but Russia has continued strikes and shown little interest in a lasting pause. Any real pause could ease pressure on diesel and product markets, yet skepticism is high after previous announcements failed to hold.

On the macro side, hotter-than-expected September CPI data cooled the oil rally. CPI rose 0.6% month-over-month and 3.7% year-over-year (above expectations of 0.6%/3.6%), with core up 0.3%. That lifted the odds of additional Fed rate hikes—markets now see roughly a 40-50% chance of an October hike and better than even odds of another by December, with talk of three more through 2027 in some forecasts. Yields and the dollar moved higher, taking some steam out of the commodity complex, including oil.

So WTI is trading in the mid-$90s (around $95) after surging on the Houthi news then giving back some gains on the CPI/dollar strength. Near-term support sits around the $92–$93 area (recent Fibonacci levels and prior congestion), with stronger support near $90. Resistance is in the mid-$96s, then the upper $98s, with the cycle highs near $102 a bigger target if geopolitics stay elevated. The setup remains constructive on a daily basis (bullish momentum indicators, higher lows), but expect continued whipsaws between war premium and macro headwinds. Brent is holding near $106 with a wide Brent-WTI spread reflecting seaborne tightness.

Nat gas pulled back as production comes back online after Hurricane Isaias. The storm (Category 2 near Destin, Florida) shut in significant Gulf output earlier in the week—at one point over half of regional oil and gas production was offline. Restarts are underway, and prices eased into the low $3.20s on Henry Hub. Storage remains comfortable, and the return of supply is weighing on the market.

Fox Weather is reporting that the weather will be cooling off after some heat across the country. Record or near-record fall heat baked the Central and Eastern U.S. early this week (upper 80s to mid-90s in many spots, heat indices over 100 in the South). A powerful cold front is now bringing a sharp cooldown. Temperatures are expected to drop 30–40 degrees in places by the weekend, with highs in the 50s across the Northeast/Great Lakes and cooler readings spreading south. Overnight lows into the 30s and lower 40s will bring the first frost of the season for many in the Upper Midwest and Central Plains. Make sure you download the Fox Weather app and stay tuned to the Fox Business Network, Invested in You.

So the energy geopolitical risk (Houthis, Middle East escalation, Russia-Ukraine energy strikes) keeps a floor under oil and products, especially diesel. Macro factors (hotter CPI, higher yields/dollar, Fed hike odds) and recovering Gulf production are capping the upside for now. Expect more whipsaws. Crack spreads remain supportive for refiners. Watch EIA data, any ceasefire developments, and Houthi follow-through. Winter weather risk is building for nat gas once the cooldown sticks. Can you get ready to flip around again on the next headline.

So Download The Fox Weather app and Stay tuned to the Fox Business Network Call 888-264-5665 or email me at 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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