Too Late Baby. The Energy Report 08/25/2025

Powell’s tone was unmistakable. The Fed’s got its eye on jobs now, and if those numbers slip, we could see layoffs and unemployment spikes faster than a barrel price on OPEC news. I think Jerome Powell is going to have little choice but to change course as it’s clear that his hawkishness is starting to harm the economy.

Probably one of the most significant things that we heard fed chairman Powell say is that he admitted that his fears about tariffs causing inflation were unfounded. The Fed chairman admitted that tariff impact on inflation will be – to use his one of his favorite words – transitory. And will only have a short-term impact. Reuters reported that, “”While the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers. This unusual situation suggests that downside risks to employment are rising. And if those risks materialize, they can do so quickly,” the Fed chief said, noting that while tariffs are expected to drive prices higher, the baseline case is for their impact on inflation to fade. “It is also possible, however, that the upward pressure on prices from tariffs could spur a more lasting inflation dynamic, and that is a risk to be assessed and managed.”

Oil also must watch the geopolitical curveballs and await reports of more executive orders coming down today from President Trump. President Trump is tossing around threats of fresh sanctions on Russia if there’s no progress on Ukraine soon, and that’s a wild card for energy traders. Don’t overlook India. Those Russian oil deals could fire up U.S. tariffs and add even more volatility.

Meanwhile, Vice President JD Vance claims Russia’s coming to the table with “significant concessions.” Ukraine lit up Russian energy infrastructure over the weekend—drone strikes triggered a major blaze at the Ust-Luga fuel export terminal, sending officials scrambling according to Reuters.

If you’re trading energy, you need to keep one eye glued to the charts and the other fixed on the headlines. Fundamentals can flip in a heartbeat, and the next global development could be the spark that ignites these markets. Stay tuned—because in this business, there’s never a dull moment!

Natural gas still is slipping as cool temperatures over the weekend shut off a lot of air conditioners. According to Natural Gas Intelligence, natural gas futures are heading for what could be the most bearish summer closing in nearly half a century. Summer is not supposed to be over for a month, but the Midwest does not believe it. September natural gas futures sank to a new nine-month low on Friday as unseasonably cool weather crushed demand outlooks, overwhelming Thursday’s bullish storage report.

September natural gas futures just can’t catch a bid—they plunged to a fresh nine-month low as this cooler-than-expected weather knocked the legs out from under demand. Even that bullish EIA storage report on Thursday wasn’t enough to turn the tide; the market got steamrolled by a wall of bearish sentiment heading into the close.

EBW Analytics says the weather outlook just took a nosedive—down 30 CDDs last week and another 8 CDDs over the weekend. That big shift swamped the bullish EIA storage report, sending the September contract tumbling 22 cents. Don’t forget, we’ve got tropical systems out there, and any demand destruction from those storms is still hanging over the market. Now with September contract options expiring and final settlement looming, you can bet volatility risks are still on the table. Storage surpluses are strong, spot prices are soft, and the weather just isn’t giving us any bullish momentum. Fundamentals look weak for now but keep an eye out—short-covering rallies can always sneak in when you least expect it.

Fox Weather is reporting that, “Forecasters are continuing to monitor strengthening Tropical Storm Fernand swirling over the open waters of the Atlantic as chances of development for Invest 99L near the Caribbean continue to dwindle. The two systems come as millions of people up and down the East Coast were blasted by impacts from Hurricane Erin as the monster storm moved dangerously close to the U.S. last week.

Make sure that you download the Fox Weather app to keep up with the latest on the weather you can also stay tuned to the Fox Business Network.

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