I’ll Take Manhattan. The Energy Report 07/16/2025

Yesterday Energy Secretary Chris Wright posted on Truth Social that “The AI race is the second Manhattan project”  which  during World War 2 was the top secret project to beat Nazi Germany to getting a nuclear bomb this analogy of course shows the importance in the energy secretary’s mind and the Trump administration as to the importance but winning the AI race not just from an economic standpoint but from a military and national security aspect as well.

Because whoever controls artificial intelligence will control the world, and you do not want to lose that race.   The focus on the artificial intelligence race shows the difference between the Trump administration and the previous administration which seemed to believe that climate change was an existential threat, a threat that meant that we could throw away billions of dollars at inefficient energy projects without giving much thought to the larger issue of meeting the demands of the real challenges of the future.

We now have an energy policy that is not driven by fear-based climate concerns but instead relies on objective considerations.

This comes as the US Energy Department reminded us that the US power grid is under pressure with energy subtraction instead of addition points out that some of the regulations by the previous administration forced the closure of base load power sources that could cause blackouts to increase 100% in just the next five years.

Yet Ground Zero in the AI race today is not Manhattan, nor is it the University of Chicago Stag’s field squash court under the stands  where they split the first atom but in Pennsylvania.

Yesterday the Trump administration announced major directives at the inaugural Pennsylvania Energy and Innovation Summit in Pittsburgh with massive public investment to achieving the goals of securing artificial intelligence supremacy.

President Trump announced significant investments from 20 leading energy and technology companies. And we’re talking about some major money from some private companies Amazon for example announced $20 billion in investment in data centers across Pennsylvania.

Blackstone announced that it would invest $25 billion for data centers and natural gas plants in northeast . Reuters reported that Blackstone had identified several sites to build the energy-intensive centers, Gray said, adding that the private equity firm also plans to partner with an electric utility to build multiple natural gas power generation facilities to fuel the data centers in Pennsylvania.

Pennsylvania. Core Weave is ponying up $6 billion to build the new AI data center in Lancaster PA.

Constellation Energy committed $2.4 billion to upgrade the Limerick nuclear power plant to support energy needs for data centers. That’s making nuclear power great again.

We also had Energy Capital Partners announcing $5 billion plan to develop a data center at the York 2 Energy center.

Meta platforms also committed $2.5 million towards a partnership program with Carnegie Mellon to support rural Pennsylvania startups and anthropic pledged 1,000,000 over years for cybersecurity education program for middle and high school students and an additional $1 million for energy research at Carnegie Mellon.

ExxonMobil also attended the meeting, and they didn’t commit any real money, but they did say they would discuss more plans for power AI infrastructure.

Brookfield asset management said they would partner with Google in a $3 billion deal to provide electricity from 2 hydro power facilities in Pennsylvania.

Obviously this meeting was a huge success not only for Pennsylvania but for the country and the trump administration it’s also going to be a big win for energy investors because the market is going to have to come to grips with the fact that the energy space is going to be one of the hottest investment areas and when you look at the energy space many of the companies that are going to be involved with actually producing well natural gas build pipelines for etcetera are really undervalued based upon the potential demand that’s just around the corner

It’s clear this meeting was a huge win—not just for Pennsylvania, but for the whole country and the Trump administration. It’s also shaping up to be a great opportunity for energy investors. The market is about to realize just how hot the energy sector is going to get, especially with all this new demand on the horizon. A lot of companies involved in producing natural gas, building pipelines, and so on are still undervalued given what’s coming. There’s real potential here that people shouldn’t overlook.

Today oil is trying to recover after the Trump administration seemed to downplay any immediate sanctions on Russia when it came to oil,

As we you know we built up a lot of risk premium based on President Trump suggesting that tough sanctions were coming on Russia but because nothing really happened it is just locking up the momentum from the market.

And it doesn’t appear though that Russia is done with attacks against Ukraine because overnight reports show that Russian drones hit more Ukrainian cities overnight.

Some folks see this pause from President Trump on Russian energy sanctions as a chance for buyers to snatch up as much oil as they can before any new rules kick in. Others think it might push Russia to act even more aggressively in the conflict, trying to gain ground before any serious sanctions come down. It’s really a wait-and-see moment, and people are watching both markets and world events closely.

Traders seemed a little bummed yesterday with the latest inflation numbers. Sure, the CPI was hotter than expected, but honestly, the month-over-month increase wasn’t as bad as the headlines made it out to be. Headline CPI increased by 0.3%, while core CPI rose 0.2%, both just under Wall Street’s 0.3% forecasts. Supporters of the tariff-inflation link note that goods prices were up yet it was not enough to support the narrative that tariffs cause inflation .

The CPI turned slightly hot , the month-over-month bump wasn’t as dramatic as the headlines made it sound. Headline CPI went up by 0.3%, and core CPI ticked up 0.2%, both just a hair under what Wall Street predicted. Some folks point to rising goods prices as proof that tariffs drive inflation, but really, the numbers weren’t convincing enough to make that case.

Now, today, all eyes are on the Producer Price Index—this could be a game-changer. If the PPI is lower than expected, energy markets and stocks may rally.  So, fingers crossed for some good news ahead.

The oil crack spreads though got a big boost after it was reported that Exxon Mobil had to borrow up to 1,000,000 barrels of oil from the strategic petroleum reserve because of the lack of quality coming out of the Mars oil platform in the Gulf of America reports suggest that there were some impurities in the oil that wouldn’t work well on the refineries .

So what is going to  happen is ExxonMobil is going to have to sell that oil to some other place that can use that type of oil but in the meantime to meet the insatiable demand for diesel and gasoline they’re going to have to rely on the SPR and borrow some oil that they will pay back.  Knowing President Trump, he will make them pay back with interest. .

Natural gas is has shown signs of bottoming and it’s being encouraged in part of more hot temperatures coming into the forecast for later this month as well as tropical storm activity down in the Gulf of America.

Fox Weather reports that Invest 93L is approaching the Gulf Coast, prompting Flood Watches. The FOX Forecast Center notes two possible tracks for Invest 93L, which will determine the areas most affected.  Fox Weather reports that when you put this investment the planes are going to be flying into the storms to investigate.  Gulf Coast is bracing for tropical moisture as Invest 93L moved through the Florida Peninsula on Tuesday and threatens to produce heavy rainfall along the Interstate 10 corridor.An investment a designation used by the NHC to indicate an area that is under increased scrutiny for the possibility of tropical development.

For the past couple of days, Florida has been the recipient of heavy rainfall, but the chances of precipitation are moving westward and will impact communities in Alabama, Mississippi, and Louisiana through the rest of the workweek.

Because waters in the Gulf are warm and there is enough spin in the atmosphere, the National Hurricane Center has highlighted an area of the eastern and northern Gulf for a medium chance of development into a cyclone. Even if 93L develops into a tropical cyclone the forecast impacts likely won’t change. Hurricane Hunter aircraft are scheduled to survey the system on Wednesday, once the center of circulation is over open water.

Make sure you download the Fox Weather app and turn on your storm alerts to keep up with this storm and other storms during the hurricane season. You should also stay tuned to the Fox Business Network because they are invested in you can also sign up for the Phil Flynn daily trade levels as well as my periodic manic metals report.  You can also open your price group account with me by calling 888-264-5665 you can also e-mail me at pflynn@pricegroup.com.