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The Energy Report

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


Someone Forgot to Tell the Oil Market. The Energy Report 06/09/2026

Many oil analysts and company executives warn that the greatest supply squeeze in history makes an oil price shock only a matter of time. Yet someone forgot to tell the oil market. After surging yesterday on concerns that the conflict could widen following Iran’s missile launches toward Israel, oil prices are falling. They pulled back from yesterday’s highs and dropped another couple of dollars in overnight trading. Many complains it is happening only because President Trump is jawboning the market, then in that case I’d say, Mr./ President, keep up the good work, unless of course you are rooting for an oil shock and global economic pain

Oh sure. Some of these folks are the same people who said that presidents have no control over oil prices, yet now they have reversed course and say that President Trump does. If true, I guess that means President Trump is the most effective president in history, as he can single-handedly keep a global market lower, thereby avoiding an oil shock, while also confronting and starting to dismantle the world’s biggest state sponsor of terror. Pretty great work.

Did he wave a magic wand, like President Obama once asked? No what President Donald Trump said that broke thew market was that a deal between Israel and Iran is imminent, and that the two will leave each other alone for at least a week. That’s nice. He told reporters late on Monday that the US was “in the final throes of what will be a very, very good deal”. Some will complain that we have heard that before even if you don’t believe it, the market does.

In classic Trump style, the President is steering us toward calmer waters in the Middle East, escalating the tensions that soared over the weekend between Iran and Israel and energy markets are breathing easier thanks to his firm hand on the wheel. Oil and products have stayed remarkably under control through all the recent tensions – a big credit to President Trump’s leadership and strategic pressure that’s delivering results without the chaos.

Yet the promise by President Trump that the Strait of Hormuz would open “immediately upon signing”, which he said could be in two or three days is really a game changer as we are already getting reports of more tankers and ships getting through the Strait of Hormuz recently. Bloomberg news is reporting that “Kuwait is offering to sell its crude to refiners in Asia for the first time since the Iran war started, the latest indication that oil flows from Persian Gulf producers are opening up despite Tehran’s threat to shipping through the Strait of Hormuz. At least 4 million barrels of the nation’s main export grade, carried on two very large crude carriers, are being offered to refiners in at least China and South Korea, traders familiar with the matter said, asking not to be identified as they’re not authorized to speak to the media.

This development is already easing some supply concerns, with shipping data showing increased tanker movements in recent days, including Chinese-flagged vessels exiting with millions of barrels of crude. If the promised full reopening materializes quickly, it could flood the market with pent-up supply and put significant downward pressure on oil prices in the near term.

Javier Blas reported thatsSignificant amount of Middle Eastern oil is leaving the Persian Gulf by tanker via the Strait of Hormuz (in addition of the bypass pipelines). the telltale is the decline over the last few weeks of onshore crude inventories. Plus, the surge in STS activity just outside Hormuz. He Also reports that the UAE state owned oil company ADNOC has awarded a tender for ~14 million barrels of crude, and it’s planning a 2nd tender. The sales are a further indication that significant volumes of crude are exiting the Strait of Hormuz in small vessels going dark (AIS beacon off).

This comes as both Israel and Iran said on Monday, they would pause attacks following their most serious escalation since a ceasefire took effect in April.

President Trump was the driving force behinds the news ceasefire and said about Iran “If we go and bomb, which we can do very easily, if we want, and we spend another two or three weeks bombing, [Iran will] have nothing left whatsoever, but you won’t have the Strait open for months,” Trump said that the US naval blockade on Iran “turned out to be much stronger than bombing” in making Iran want a deal. Trump, who has reportedly grown increasingly exasperated with Netanyahu, told Axios that he had warned the Israeli prime minister about the consequences of continuing the war. “I said, ‘Bibi, you better be careful, or you will be on your own very soon’,” Trump said.

And while it might not feel like it to some, gasoline prices have been slowly falling for 4 weeks in a row and fell again last night. That seems to be angering some Trump critics who are pulling for higher prices just so President Trump does poorly in the Mid Terms. It makes you wonder if some are OK with people’s economic pain just so they can get Trump, but prices are falling nonetheless.

According to the latest AAA data, the national average for regular unleaded gasoline now stands at $4.16, down from $4.164 yesterday, $4.29 a week ago, $4.53 a month ago, and a sharp improvement from $3.12? Now under Trump a year ago gas was much lower at $3.12, but the recent trend is clearly downward and if we achieve a nuclear free Iran it will be worth it. Mid-grade is now $4.66, premium $5.04, diesel $5.32, and E85 at $3.22. All grades show solid declines over the past week and month, giving American drivers some much-needed relief at the pump heading into summer travel season.

This continued drop comes as U.S. energy production remains strong, global supply concerns ease, and domestic inventories hold up better than expected. President Trump’s pro-energy policies are continuing to deliver results, with America leveraging its energy dominance to keep prices in check despite geopolitical noise. While some in the media and political opposition seem more focused on higher pump prices as a political weapon than on helping working families, the data doesn’t lie—gasoline is getting more affordable week after week.

On the flipside, some analysts are calling for oil Armageddon, warning that U.S. Strategic Petroleum Reserve (SPR) inventories are plunging toward Biden-era historic lows. The reserve recently dropped another 8 million barrels in a week, sitting around 357 million barrels as of late May 2026 — levels not seen since the early 1980s.

Critics point out that Biden tapped the SPR aggressively (over 180 million barrels in the largest release in history) ahead of the midterms to artificially suppress prices, others warn of a potential oil price shock if the Strait of Hormuz doesn’t reopen meaningfully in the coming weeks.

Citigroup (Citi), for example, has repeatedly warned of significant upside risks for oil prices, including the potential for a price shock tied mainly to disruptions in the Strait of Hormuz amid the U.S.-Iran conflict. In Citi’s near-term base case, Brent crude could rise to $120 a barrel as inventories tightens sharply. If disruptions persist, the firm says oil could reach $150 a barrel, especially if the reopening is slow in the third quarter of 2026 or if infrastructure damage proves more lasting. Citi has also warned that a more extreme, 1970s-style oil shock would likely require the strait to remain closed into early 2027, a scenario that could push prices much higher and raise broader stagflation risks. Earlier scenarios from April and May 2026 also pointed to prices above $110 if disruptions lasted another month, along with major inventory draws and sharply higher second- and third-quarter price forecasts.

Citi has also pointed to factors that could cushion the impact, including demand adjustments, alternative shipping routes, and production gains from the United States, Canada, and Russia. Still, the firm sees prolonged moderate disruptions as a major headwind, with oil prices likely settling near $100 a barrel in that scenario.

Get whether city is going to be right or wrong and that doesn’t matter the market doesn’t believe it and right now I have to go with the market there are many other analysts too and traders that are very frustrated that we’re not seeing prices soar here and I get it but right now I think you have to look at the management of global supplies that’s pretty incredible by the trump administration the ones that are still predicting oil doom and gloom are the same ones that thought it would be here already so you have to either believe the president trump has more influence on global oil prices than any president in the history of the country or you have to believe they just know what they’re doing or you have to believe that the oil markets have got it wrong I report.

Natural gas futures are trying to make a bit of a stand. After recent volatility, the market is showing some resilience as traders balance solid fundamentals with shifting weather patterns. The July NYMEX contract has been hovering in the $3.10–$3.20 range early today, finding support amid a slightly tighter-than-expected storage build and steady demand drivers.

Fundamentals remain constructive overall. The latest EIA Weekly Natural Gas Storage Report (for the week ending May 29) showed a build of +95 Bcf, bringing working gas in storage to 2,578 Bcf. This was a touch below consensus expectations and just below last year’s levels while sitting 138 Bcf (about 5.7%) above the five-year average. Inventories are comfortable heading into summer, but the smaller build helps limit downside and highlights the market’s ability to absorb injections even as production remains robust.

U.S. dry natural gas production continues at strong levels, with Lower 48 output averaging well over 110 Bcf/d and EIA forecasting further growth to around 118.9 Bcf/d for the full year. Associated gas from higher crude prices provides a steady supply tailwind. On the demand side, LNG exports remain a key growth pillar, averaging strong flows (with new capacity additions supporting further upside later this year and into 2027). Power generation demand is picking up seasonally, and industrial use holds steady.

Geopolitics and global LNG dynamics also lend support, with any disruptions in other basins potentially boosting U.S. export opportunities. The Commitment of Traders report and technical levels suggest bulls are defending key support, though ample storage and production keep a lid on any runaway rally for now.

Looking ahead, the injection season will test the market’s balance. With production steady and exports growing, the path of storage builds over the next several weeks will be critical. A continuation of moderate builds (or smaller ones if heat ramps up) could keep prices supported.

So the key will be the Fox Weather heat outlook as they report that early summer patterns are showing potential for building heat across the southern, central, and eastern U.S., with above-normal temperatures possible in key population centers and power-demand regions as we move through mid-to-late June. A hot ridge could boost cooling demand and lift power-sector gas use, providing a seasonal tailwind—though forecasts have shifted cooler in spots for the second half of the month, keeping traders on their toes. Overall, the setup favors moderate-to-high weather-driven demand if the heat materializes as expected.

So make sure you download the Fox Weather app and stay tuned to the Fox Business Network for all the latest updates! Follow Phil Flynn on X at @EnergyPhilFlynn, nd join the conversation on Facebook by following Phil Flynn invite your friends for and commodity market insights! Contact me for trade levels and to open an account by calling 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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Contact Phil at 1-888-264-5665 or pflynn@pricegroup.com.