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The Energy Report

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


Peace or Pre-Election Pause? The Energy Report 11/02/2026

War and peace and the Midterms. Oil prices have fallen about 4.5 percent this morning on talks between Iranian officials for a path to end the war with the U.S., Israeli, and Iran but at the same time rumors of a massive military buildup and preparations for a major regional war if the peace talks fail persist.

While we are seeing optimism as oil prices fall below $100 a barrel on WTI, the question is whether the U.S. is just talking peace ahead of the midterms while in the background preparing to land a knockout blow on the Iranian regime. Iranian and Qatari officials held talks over the weekend in Doha on a potential deal that could ease Middle East supply disruptions, particularly around the Strait of Hormuz.

Iranian negotiators left the Doha talks on Sunday, but not due to difficulties in the negotiations, according to an official briefed on the discussions. A draft proposal is circulating, and a follow-up meeting remains possible. Iran’s Foreign Ministry spokesman Esmail Baghaei said exchanges of messages with the U.S. continue via Qatari mediators, and that Hormuz cannot be reopened before the lifting of U.S. sanctions and an end to the naval blockade.

Deputy Foreign Minister Kazem Gharibabadi was in Doha to facilitate the process. Iranian Foreign Minister Abbas Araqchi has said Tehran is prepared for both “defense and diplomacy,” and that a compressed plan could reopen the strait in as little as two days if U.S. conditions are met—though no breakthrough has been confirmed.

Also, there are some reports that Chinese President Xi Jinping, is meeting with Oman’s Sultan Haitham bin Tariq in Beijing today, offered to help address Middle East challenges and seek safe passage for ships through Hormuz.

Xi said China is willing to offer ideas and solutions to security concerns in the region and called for deeper energy cooperation. A joint statement stressed that normal and safe navigation through Hormuz should be restored and urged the U.S. and Iran to pursue peaceful options and return to dialogue.

This comes as regional diplomats warn that any new escalation would likely be more damaging than prior rounds. Egyptian Foreign Minister Badr Abdelatty said over the weekend that a second round “will be more dangerous, more destructive and it will lead to nowhere,” adding that Egypt is “extremely worried.”

In the background, attacks on shipping continue, Saudi Arabia has faced ongoing Houthi missile and drone activity, and markets remain sensitive to the possibility that rhetoric could harden after tomorrow’s U.S. midterm elections.

Inventories have been drawn down significantly since Hormuz disruptions began earlier this year, leaving less cushion if talks stall. For now, the absence of major military escalation over the weekend has taken some heat out of prices, with Brent trading near $109–110 and WTI around or just under $100. Whether this dip holds depends on whether diplomacy produces real progress on Hormuz or simply buys time.

Gas prices are trying to ease lower but are still elevated, and diesel is still the big problem. The national average for regular gasoline sits at about $4.17 a gallon this morning, down a fraction of a cent from yesterday and roughly 11–12 cents from a week ago, thanks to the recent drop in crude and the seasonal switch to cheaper winter blends.

Mid-grade is near $4.66 and premium around $5.06. Diesel, however, remains stubbornly high at about $6.29 a gallon—barely changed from yesterday and still well above $6.30 from a week and month ago.

Year-over-year, drivers are paying more than a dollar extra for regular compared with early November last year, and the gap is even wider on diesel. Until crude can hold below $100 and stay there, further relief at the pump will be limited.

Nat gas is trying to find an identity as Fox Weather continues to send signals of weak demand but warns of what a Super El Nino will mean for natural gas prices.

EBW Analytics reported that while a beaten-up November contract staged a 32¢/MMBtu (+13%) rally into final settlement, bullish momentum failed to transfer to the December natural gas contract as it stumbled to fresh lows amid exceptionally bearish November weather and rising production. EBW says that shoulder season physical pricing may get ugly amid storage filling and increasing production curtailments. While a relief rally is possible amid record speculator shorts, probable peak storage above 3.9 Tcf and a supply boom-to-come highlight medium-term downside risks. This comes as Fox Weather reports that winter could feature a tug-of-war pattern between the Polar Vortex and Super El Niño. This winter could be one for the record books as Super El Niño and the Polar Vortex go head-to-head.

With a predicted warmer winter ahead, the Polar Vortex may break down earlier than ever, sending cold air into the U.S. in late November or December. Only time will tell if Super El Niño with its warmer-than-average winter will come out on top or if the Polar Vortex will win out. I am rooting for Super El Nino

Fox Weather says that Winter 2026–27 is expected to feature a record Super El Niño, bringing warmer-than-average conditions for much of the country. While many questions surround an El Niño of this magnitude, forecasters are also watching and predicting how the polar vortex could interact with this weather pattern. The polar vortex, a region of fast-moving winds encircling Earth’s poles, always exists, and it’s often the source of extreme-cold outbreaks that impact the U.S. in the winter.

These outbreaks occur when the normally stable vortex is disrupted by a rapid temperature increase in the stratosphere, tens of thousands of feet above the surface, called a “Sudden Stratospheric Warming” event. Sudden Stratospheric Warming events can stretch or displace the polar vortex away from the pole, dragging the core of dense Arctic air southward with it, sending it into the Northern Tier of the U.S

Typically, the polar vortex is very stable and strong during the fall, allowing cold air to bottle up and cause more disruptions in the winter months. This year, however, forecast models are saying this may not be the case, as Super El Niño continues to strengthen through the fall and winter. Historic Polar Vortex disruption could arrive earlier than ever. Here’s what it means for winter.

Forecasts are predicting that the polar vortex will weaken to record lows through early November. What happens after that depends on whether the disruption influences the atmosphere below, the FOX Forecast Center said.

Circulation changes could extend downward over subsequent weeks, increasing the likelihood of the cold air shifting south into North America, including the Issuer El Niño could offset some of the cooling that the polar vortex pushes into the U.S., the FOX Forecast Center said. El Niño is known for changing the large-scale circulation across the Pacific, often favoring a stronger southern jet stream and a milder winter pattern across Canada and the northern U.S. And the best way to stay on top of this is to download the fox weather app at the same time you should stay tuned to the Fox Business Network because they are the only network in America that is truly invested in you make sure that you sign up for the wildly popular Phil Flynn daily trade levels aim to open a trading account by calling 888-264-5665 again Phil Flynn 888-264-5665 email pflynn@pricegroup.com.



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