Inappropriate. The Energy Report 05/29/2025

If Israel attacked Iran, would it be inappropriate or mildly inappropriate? President Trump stated it would be inappropriate but after a report from Fox News could the President change his mind.

President Trump yesterday said that discussions with Iran are in their “final moments.” He admitted advising Israeli Prime Minister Netanyahu against bombing Iran’s nuclear facilities, saying it was “inappropriate. Today a report that was “FIRST ON FOX” said that a new intelligence report claims Iran is continuing with its active nuclear weapons program, which it says can be used to launch missiles over long distances.

Fox News reported that, “The startling intelligence gathering of Austrian officials contradicts the assessment of the U.S. Office of the Director of National Intelligence (ODNI).  Director of National Intelligence Tulsi Gabbard told a Senate Intelligence Committee in March that the American intelligence community “continues to assess that Iran is not building a nuclear weapon and Supreme Leader Ayatollah Ali Khamenei has not authorized the nuclear weapons program he suspended in 2003.”

This report was released a day after President Trump suggested negotiating with Iran to prevent loss of life and conflict. Oil prices pulled yesterday back after an unconfirmed report from Reuters that Iran might be considering a uranium enrichment pause in return for President Trump lifting sanctions and freeing up frozen Iranian funds. Iran later denied the report.

Yet for the world of oil trading, it is uncertainty with risk on risk off, tariffs on, tariffs off. It also creates a great range of trades and those of you that get my Phil Flynn Daily Trade Levels can see.

We see a backdrop of tightening oil supplies and the potential for less oil production in the US and an agreement by OPEC to maintain their formal crude output quotas and keeping their 2-million-barrel production cut in place for 2026. The unity displayed by OPEC+ was notable. While the group may add some barrels back to the market in July, the group indicated that they might offset additional barrels with compensation cuts from other OPEC members, which could mitigate the effect of those extra barrels.

Chevron plans to lay off nearly 800 employees in the Permian Basin, its largest oil production area, adding to concerns about Permian oil output. Bloomberg reported that the bulk of the reductions will come from Chevron’s Mid-continent campus on the outskirts of Midland, Texas, the company said in a filing with the Texas Workforce Commission.

The filing listed the layoff date as July 15, 2025. “Chevron is taking action to simplify our operating model, execute work faster and more effectively,” the company said in a statement. “This is a difficult decision, and we do not make it lightly.” Chevron is undergoing one of the biggest restructurings in its modern history and announced plans to reduce its global workforce by as much as 20%, or 9,000 people, by the end of 2026. Chief Executive Officer Mike Wirth is looking to reduce structural costs by $3 billion, making the company more efficient and better able to withstand low oil prices.

Yesterday the American Petroleum Institute showed crude oil supplies decreased by 4.236 million barrels, which was larger than anticipated. Additionally, there was a moderate decrease in gasoline inventories of 528,000 barrels, and an increase in distillate inventories of 1.295 million barrels. Today, the Energy Information Administration report will be released at 10:00 AM, focusing on gasoline demand.

Natural gas prices dropped yesterday but are expected to recover. Long-term fundamentals appear strong, though short-term prospects are less favorable. An increase in LNG exports later in the year may significantly improve the market. Comments from Germany regarding their natural gas imports added downward pressure on the market.

I think the other key issue for natural gas is going to be weather. That’s why you should download the Fox Weather app to keep up with the latest energy developments and stay tuned to the Fox Business Network.

Call me today to open your futures trading account at 888-364-5665 or e-mail me at Pflynn@pricegroup.com.