Sanction- itis. The Energy Report 08/01/2025

Oil prices got a bit of a boost after it was reported by Reuters that Indian state refiners have stopped buying Russian oil in the past week as discounts narrowed this month. U.S. President Donald Trump warned against purchasing oil from Moscow, industry sources said. India, the world’s third-largest oil importer, is the biggest buyer of seaborne Russian crude. That was initially viewed as bullish as it would put India in the marketplace to buy up extra barrels of oil that was counteracted after President Trump announced new sanctions on its trading partners especially Canada but gave Mexico 90 days to negotiate.

Canadian energy gets off a little lighter, facing a 10% tariff. So that amount shouldn’t make US refiners stop buying Canadian oil. This isn’t business as usual. President Trump is sending a loud-and-clear message: Mexico, Canada, China—it’s time to put your money where your mouth is. The days of empty promises about stopping illegal immigration and blocking toxic drugs like fentanyl from pouring into the U.S. are over. The stakes? Nothing less than the safety and security of every American. The White House also said that “Access to the American market is a privilege. The United States has one of the most open economies in the world, and the lowest average tariff rates in the world.

The White House said that, “While trade accounts for 67% of Canada’s GDP, 73% of Mexico’s GDP, and 37% of China’s GDP, it accounts for only 24% of U.S. GDP. However, in 2023 the U.S. trade deficit in goods was the world’s largest at over $1 trillion. Tariffs are a powerful, proven source of leverage for protecting the national interest. President Trump is using the tools at hand and taking decisive action that puts Americans’ safety and our national security first. Though previous administrations have failed to leverage America’s combination of exceptional strength and its unique role in world trade to advance the security interests of the American people, President Trump has not.

Reuters reported that -Exxon Mobil beat Wall Street estimate for second-quarter profit on Friday as higher oil and gas production helped the top U.S. oil producer overcome lower crude prices. Adjusted earnings during the second quarter were $7.1 billion, or $1.64 per share, surpassing consensus analyst estimates of $1.56 per share, according to data compiled by LSEG. Oil and gas production was the highest for any second quarter since the company was formed by the merger of Exxon (NYSE:XOM) and Mobil more than 25 years ago, the oil producer said.

In the big picture the bolts have a bit of an edge as the market continues to stay above key moving averages for crude oil products and crack spreads are pulling back just a little bit on the tariff concerns and the fact that summer is quietly creeping past us.

Sometimes when it’s hot in the summer natural gas prices go down and sometimes when it’s cool in the summer natural gas prices come up. I know it’s counterintuitive but it’s the way that the market looks not only at the current situation, but the futurist market looks ahead and a lot of that depends on weather. That’s why I keep telling people that they need to download the Fox Weather app to keep up with this especially if you’re trading natural gas.

Natural gas may have finally turned the corner after dipping below $3 before sharply rebounding even after what was a bearish report based on market expectations. The bearishness seemed to hit exhaustion levels and the traders that have a target of $3 to take profit apparently did so and when the market broke $3 and failed to follow through, it caused a surge in a potential V bottom technically. It sure helped that we got a little bit of heat as well.

Prices dipped as low as $2.97—levels we haven’t seen since April—before bouncing back above $3.10 by the end of the trading day. This quick turnaround happened thanks to a mix of technical support at a long-term trend line and some important trading levels around $2.96, leading to a wave of traders closing out their short positions.

What makes this turnaround more impressive is the fact that it turned around on what was considered to be a bearish weekly report. The U.S. Energy Information Administration reported that natural gas storage grew by 48 billion cubic feet—beating the forecast of 41 bcf and topping the five-year average increase of 24 bcf. Storage now stands at 3,133 bcf, which is 6.7% above the five-year average but still 3.9% shy of where we were last year. While this larger build initially put some pressure on prices causing that brief dip below $3, updated weather forecasts calling for hotter days ahead turned things right around in a hurry.

It’s predicted by some after this cool down. Meteorological models shifted Thursday to anticipate above-average highs from August 5–9 across the Southwest and into the Texas Panhandle. Atmospheric G2 projects peak cooling-degree-day demand will climb 15% above normal, setting the stage for power plants to ramp up gas burn for air-conditioning. BNEF data shows U.S. power-sector gas demand at 80.5 bcf/d, down 7.0% year-on-year but primed to surge in an early-August heatwave.

On Top of that, the Fox Weather Forecast center is warning that the, “Tropics shows signs of springing to life in Atlantic Basin as calendar flips to August.” Fox Weather says that Some computer forecast models are showing signs that the Atlantic Basin’s Main Development Region between Africa and the Caribbean islands may be starting to see an uptick in tropical activity as we enter into August.

While nothing is immediately concerning or imminent when it comes to tropical development, it appears that the atmospheric conditions that have been hostile so far are showing inklings of gradually becoming more favorable. There is a tropical wave moving through the Main Development Region, but it isn’t a threat at this time. We don’t even have a bona-fide system to track just yet,” FOX Weather Meteorologist Britta Merwin said. “But there’s enough indications in the long-term computer forecast models that say we should watch this tropical wave.”

I think it’s so important that you keep an eye on this weather and warm up  tropical heat up by downloading the Fox weather app. You should also stay tuned to the Fox Business Network because they are the only network in America that is truly invested in you.

It’s also time that you open up your trading account by calling Phil Flynn today at 888-264-5665. We can get you set up with the trade levels on all the major commodity markets as well as access to special information.