
Phil Flynn
Phil Flynn is writer of The Energy Report, a daily market commentary discussing oil, the Middle East, American government, economics, and their effects on the world's energies markets, as well as other commodity markets. Contact Mr. Flynn at (888) 264-5665
Translate
To Enrich or not to Enrich. The Energy Report 06/03/2025
To enrich or not, that is the question. Oil’s focus this morning is really on whether we can get some type of an Iran nuclear deal. This comes as the oil markets are seeing much firmer fundamentals in a much tighter market than anticipated. Wild wires continue to rage in Canada that risks tightening supply even more.
On one hand there are reports from Axios suggesting that the Trump Administration might allow some uranium enrichment from Iran for domestic purposes. But President Trump’s attitude on Truth Social suggests zero tolerance for Iran nuclear ambitions.
Axios reported that, “The nuclear deal proposal the U.S. gave Iran on Saturday would allow limited low-level uranium enrichment on Iranian soil for a to-be-determined period of time, Axios has learned, contradicting public statements from top officials.”
On Truth Social the President seemed to make it clear that “The AUTOPEN should have stopped Iran a long time ago from “enriching.” Under our potential Agreement — WE WILL NOT ALLOW ANY ENRICHMENT OF URANIUM!” Trump wrote on Truth Social.”
This came one day after the market rallied after the OPEC decision to raise production by the expected 411,000 barrels were greatly exaggerated. There were unsubstantiated claims that OPEC would discuss a larger production increase, reports of infighting, and speculation about Russia leaving or the UAE demanding a higher production cut. These were exaggerations not grounded in reality, which explains the market’s rebound after OPEC’s decision.
In the meantime, the spreads in the oil market appear more favorable, as refining margins worldwide are strong, indicating robust demand and a tighter market.
Product demand for petroleum looks solid. Reuters reported that refiners across the globe are reaping unexpected profits from producing key fuels in recent weeks, offering an ailing sector respite before an anticipated weakening later this year, as plant closures have tightened fuel supply needed to meet peak summer demand.
The strength in fuel markets contrasts with crude oil prices falling to a four-year low in May, after OPEC+ unwound output cuts faster than planned. It also suggests demand has so far proved resilient despite ongoing concerns about the impact of tariffs.
Yet it its a fact that we are in a battle to meet the demand for the economy of the future when it comes to artificial intelligence. The Trump Administration gets it that we’re in this battle as private companies are taking steps to meet demand.
According to a CNBC report, Meta has signed a 20-year deal to buy nuclear power from Constellation Energy, aiming to meet the growing energy needs of its data centers. Starting June 2027, Meta will purchase approximately 1.1 gigawatts of energy from Constellation’s Clinton Clean Energy Center in Illinois, which is the site’s entire output. This agreement will support the plant’s operations and relicensing. Without Meta’s commitment, the plant faced closure when its zero-emission credit expired.
Of course, it’s going to be the biofuel issues which has driven down the price of soybean oil pretty dramatically as there’s concerns that the Trump Administration is not going to have as big a biofuel mandate. Successful Farmer reports that, “the Environmental Protection Agency (EPA) is expected to propose new RVOs, which regulate the use of biofuels. Farmers and agricultural leaders hope these mandates will increase significantly.”
“Farm groups and companies like ADM and Bunge are requesting no less than 5.25 billion gallons of biomass-based diesel for 2026 — 60% higher than 2025’s level. They also want the ethanol mandate to stay at 15 billion gallons,”Farms.comreported.
“Interestingly, the American Petroleum Institute is also supporting this push. However, some refiners oppose the plan, citing low gasoline sales and limited feedstock supply for biofuels,”Farms.comreported. “According to the EPA, the upcoming RVO proposal has already been submitted to the White House and will soon be open for public comment.”
Natural gas is back and forth with the weather. There was a nice upward bullish reversal yesterday on concerns of more demand and tight supplies. We are also seeing concerns about a potential tropical storm developing in the Gulf of Mexico. Fox Weather has reported that forecasters are monitoring the Southeast coast for potential tropical development this week. On Monday, the National Hurricane Center identified an area from Florida to North Carolina with a low 10% chance of development over the next week. I like the natural gas and recommend putting on option strategies going into the summer.
Download the Fox Weather Ap to keep up with the storm risk. Stay tuned to the Fox business Network! Invested in you!
Sign up for my Daily Trade Levels report and open your account. Call Phil Flynn at 888-264-5665 or e-mail me atpflynn@pricegroup.com.
Phil Flynn
Senior Market Analyst & Author of The Energy Report
Contributor to FOX Business Network
2918 S. Wentworth Ave. FL 1, Chicago, Illinois 60616
312 264 4364 (Direct) | 888 264 5665 (Direct) | 800 769 7021 (Main) | 312 264 4303 (Fax)
www.pricegroup.com
Please do not leave any instructions for orders in your message, as we cannot execute instructions left through email or voicemail. Orders must be entered via direct verbal communication with a representative of our firm. We cannot be held responsible for orders left in any other manner. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Investing in futures can involve substantial risk & is not for everyone. Trading foreign exchange also involves a high degree of risk. The leverage created by trading on margin can work against you as well as for you, and losses can exceed your entire investment. Before opening an account and trading, you should seek advice from your advisors as appropriate to ensure that you understand the risks and can withstand the losses. Member NIBA, NFA.