|
« Return to 321energy.com
The Energy ReportPhil Flynnhttp://www.pricegroup.com/ pflynn@pricegroup.com The Phil Flynn Energy Report 07-18-2019 Give Peace A Chance All Trump is saying is give peace a chance, or maybe Senator Rand Paul a chance. Or maybe peace with Iran is just chancy. Oil prices tanked, breaking key support on a report that President Trump is going to send Senator Rand Paul to Iran to talk peace. Oil traders know that this can be a game changer for oil as the potential lifting of sanctions on Iranian oil could tip the balance of the market from being undersupplied to being oversupplied. Yet an admission by Iran that they seized an UAE oil tanker may make talks more difficult. We know from past experience that when there are expectations of Iranian oil coming back to the market, it is very bearish. The original lifting of sanctions by the Obama administration to the Trump waivers to buyers of Iranian oil caused significant selloffs in oil. Yet it might be a little too early to start counting those barrels. Fox News reports that Iran has admitted to seizing a foreign tanker with 12 crew members accused of smuggling oil in the Persian Gulf, the country's state TV says. "The seizure comes as tensions mount between the U.S. and Iran over the unravelling nuclear deal between Tehran and world powers, and days after an oil tanker based in the United Arab Emirates disappeared off trackers in Iranian national waters." It is not clear whether this admission will stall the Trump/Paul peace talks. Iran had denied that they had seized the tanker yesterday but that was yesterday. Iran may actually use this tanker as a bargaining chip in talks, yet Iran still is blaming the U.S. for all of its problems. At first, the Iranian missile program was on the table and now it is apparently off the table. Bloomberg News reported that Iran says that "The U.S. shot itself in the foot" by pulling out of the nuclear accord with Iran, Foreign Minister Javad Zarif said, offering a grim outlook for the chance of opening talks with President Donald Trump. Zarif, in an interview Wednesday with Bloomberg Television, also accused European countries that are part of the agreement of failing to carry out their own commitments under the 2015 deal and after the U.S. withdrawal. He said, "promises to allow Iran to sell oil and repatriate money have failed to materialize." So far, the Trump Administration has reacted with caution on the tanker situation, perhaps hoping that they can get back to talks. We can also talk about U.S. oil inventories, which was obviously impacted by Tropical Storm Barry. The EIA reported that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.1 million barrels from the previous week. At 455.9 million barrels, U.S. crude oil inventories are about 4% above the five-year average for this time of year. Total motor gasoline inventories increased by 3.6 million barrels last week and are about 2% above the five-year average for this time of year. Finished gasoline and blending components inventories both increased last week. Distillate fuel inventories increased by 5.7 million barrels last week and are about 2% below the five-year average for this time of year. Propane/propylene inventories increased by 0.5 million barrels last week and are about 5% above the five-year average for this time of year. Total commercial petroleum inventories increased last week by 11.7 million barrels last week. Still despite fears of being oversupplied the EIA is showing that OPEC has problems. The EIA reported that "Unplanned crude oil production outages for the Organization of the Petroleum Exporting Countries (OPEC) averaged 2.5 million barrels per day (b/d) in the first half of 2019, the highest six-month average since the end of 2015. EIA estimates that in June, Iran alone accounted for more than 60% (1.7 million b/d) of all OPEC unplanned outages." The EIA say that Natural gas prices are set to be the lowest in 20 years. The Heat wave is coming but you might not feel it with your electric bills thanks to the U.S. energy industry and fracked natural gas. The Energy Information Administration (EIA) forecasts Henry Hub natural gas spot prices for June, July, and August this year will average $2.37 per million British thermal units (MMBtu). If realized, this price would be the lowest summer average Henry Hub natural gas price since 1998. EIA expects Henry Hub natural gas prices will be 55 cents/MMBtu lower, about 19%, than last summer’s average. In the July short term energy outlook (STEO), EIA revised its forecast for 2019 Henry Hub natural gas prices down from the June STEO following three consecutive months of price declines. Prices in June averaged $2.40/MMBtu and have declined by 19% since March. Spot prices at key trading hubs across the country have traded close to the Henry Hub basis. Prices at the Transcontinental Pipeline Zone 6 trading point for New York City and the Chicago Citygate were both at $2.12/MMBtu, the lowest June average price and a decrease of 25% and 23%, respectively, from June 2018. The PG&E Citygate near San Francisco had the highest June average price at $2.59/MMBtu, a 14% decrease Man has the God given right to prosper! Tune into the Fox Business Network where you get the Power to Prosper! Trade Expo Chicago is this weekend! I am looking forward to meeting all of you! There is a substantial risk of loss in trading futures and options. 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. PLACING CONTINGENT ORDERS SUCH AS "STOP LOSS" OR "STOP LIMIT" ORDERS WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS. SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCH ORDERS. 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. |