[+ Font] :: [- Font] :: Printable

The Energy Report

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


Iran Envy. The Energy Report 05/12/2026

Oil Prices are back over $100 a barrel as energy markets remain on high alert as the US-Iran conflict shows no signs of a quick resolution. There are fresh reports that the UAE—former OPEC member—has joined the fight. Iran has long been spoiling for this clash with the UAE, clearly jealous of its neighbor’s stunning success while the Iranian regime clings to its last legs and has attacked the UAE time and time again without any provocation accept of course the envy of the UAE economic successes.

These escalating tensions, coupled with persistent headlines underscoring supply risks through the Strait of Hormuz, are fueling this latest oil rally but in the past every rally of WTO over $100 a barrel since the conflict has begun has been short lived! The moves in oil have been great for day and swing traders but hard core bulls that are on the last surge higher, still have a way to go to get back to even.

The bullish run this time was set as President Trump flatly rejected Iran’s latest peace proposal, calling it “unacceptable” due to Tehran’s refusal to commit to zero nuclear weapons or enrichment. Trump described the ceasefire as “on massive life support” and “weak,” while signaling he has a clear plan, will huddle with generals and his national security team, and expects “complete victory” with zero pressure on the U.S. side. He also highlighted Iran’s unrealistic demand on removing “nuclear dust”—which would require U.S. or Chinese assistance—as a major sticking point.

Oil bulls are touting the closure of the Strait as it yanks millions of barrels a day off the global market—losses that just can’t be replaced! This supply squeeze is hitting hard, especially with the latest Reuters survey revealing OPEC pumping at the lowest level in 26 years—yes, you read that right, the weakest since 2000, down a whopping 830,000 barrels per day thanks to the Iran conflict.

But while the world scrambles, energy giants like BP, Shell, and TotalEnergies are making hay while the sun shines, raking in billions as war-fueled volatility sends trading profits soaring. Meanwhile, jet fuel shortages are adding extra turbulence for global airlines, especially in Europe with major hubs like Heathrow in London seeing lighter passenger traffic.

Despite ongoing supply risks keeping a bullish tilt in oil markets, there’s optimism around renewed diplomatic efforts and the potential for positive outcomes. President Trump’s upcoming talks in Beijing with Xi Jinping aim to address the “Iran oil lifeline,” the Strait of Hormuz, and US energy priorities. Notably, Trump’s proposal to temporarily pause the 18-cent federal gasoline tax and his consideration of reviving “Project Freedom” have been met with hopeful anticipation. “Project Freedom” will be a proactive initiative that will stabilize energy prices as we boost domestic energy production, offering a brighter outlook for American consumers and the broader market.

We are seeing some small relief at the gas pump as AAA reports a few days of drops in national averages. President Trump is floating the idea of temporarily dropping the federal gas tax to help ease the pain for American drivers. This comes on the heels of waiving the Jones Act and issuing waivers on summertime gas blends, along with pointed criticism of California for importing oil from Canada and the Middle East while restricting its own production and pushing refineries out of state.

According to the latest AAA data, the national average for regular gasoline now stands at $4.504, down from $4.520 yesterday but still well above the $4.125 level from a month ago and the $3.137 seen a year ago. Mid-grade is averaging $4.994 (yesterday $4.997), premium is $5.366 (yesterday $5.374), and diesel is holding at $5.644 (yesterday $5.636). E85 is currently at $3.614. For context, week-ago figures were regular $4.483, mid-grade $4.967, premium $5.341, diesel $5.659, and E85 $3.627. Month-ago averages sat notably lower across the board at regular $4.125, mid-grade $4.636, premium $5.003, diesel $5.663, and E85 $3.279. Year-ago prices were much softer: regular $3.137, mid-grade $3.608, premium $3.968, diesel $3.510, and E85 $2.543.

While the recent daily declines offer a bit of breathing room, prices remain elevated compared to last year, underscoring ongoing supply tightness and the impact of policy decisions on refining capacity and transportation costs. The administration’s latest moves signal a clear push to prioritize lower energy prices and domestic production in the near term.

Natural gas is showing some real fight this week, After grinding through a punishing downtrend that had bears licking their chops and prices testing multi-month lows, we’ve seen an impressive bounce that could be the start of a genuine trend reversal. June futures have climbed back above key technical levels, trading near $2.85–$2.93/MMBtu as of May 12, with solid gains on the session and over the past week.

This isn’t just noise—it’s a market that’s been oversold and now looking for a reason to run. We’ve had production curtailments from majors like EQT due to those rock-bottom spot prices, and the latest EIA storage report showed a lighter-than-expected injection (63 Bcf vs. expectations around 70+), tightening things up faster than the bears wanted. Inventories are still above average, sure, but the surplus is shrinking, and that’s bullish fuel for this bounce.

Technicals are flashing green, too. We’ve broken out of that falling wedge pattern, reclaimed key moving averages, and are testing resistance with momentum building. Bulls defended important support zones, and this reversal candle action suggests the downtrend might finally be losing steam. If we hold here and push through the next hurdles, we could see a test of higher ground—maybe $3.00+—as the market shifts focus from shoulder-season blahs to summer cooling demand. Call me at 888-264-5665 to get involved.

But remember weather is key here, as always. Recent forecasts have been shifting toward hotter conditions across the eastern half of the U.S. in the coming weeks, which could crank up air-conditioning demand and pull more gas into power generation. NOAA and models are eyeing above-normal temps that should boost cooling degree days, especially as we head deeper into May and June.

Early heat in the South and West, combined with near-normal patterns overall, is already starting to tilt the balance. No more of those rogue late-spring chills crimping injections—now we’re talking potential demand pickup that could keep storage builds in check. Download that Fox Weather app and stay tuned, because a hotter-than-expected stretch could be exactly what this market needs to sustain the bounce and flip the script on the longer-term downtrend.

LNG exports remain a supportive factor in the background, even with some maintenance, and global prices are giving U.S. gas a bid. Production is robust but showing signs of responding to price signals, which could cap the downside.

Bottom line: This impressive bounce has legs if the technicals hold and Fox Weather delivers on the heat. The downtrend isn’t dead yet, but it’s on life support. We’ve got a shot at a real reversal if demand cooperates. As always, trade the tape, manage risk, and let’s see if the bulls can keep this momentum going.

Download the Fox Weather ap and Stay Tuned the Fox Business Network – they are invested in you!! Call me at 888-264-5665 if you want to talk about strategies or get involved. Past results are not necessarily indicative of future results. Trading futures involves substantial risk.



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.