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
Out Of Favor. The Energy Report 10/20/2025
The gold to oil ratio continues to be out of whack as well as out of favor. Today oil prices are under pressure because we’ve seen a resumption of the shaky Israel/Hamas ceasefire that seemed to break apart over the weekend and the fact that Chinese economic data was not very encouraging.
According to Reuters, China’s economy grew by 4.8% in the third quarter, compared to 5.2% in the second quarter, which was right in line with forecasts. The September data reveals that retail sales were weaker, but factory output came in more strongly. Still, the ongoing property slump and trade tensions are putting pressure on demand and investor confidence. With growth slowing, many investors are hoping for new stimulus measures, and all eyes are on the upcoming party meeting for any signs of how leaders might try to rebalance the economy.
Reuters also noted that China’s economic growth in Q3 was the slowest it’s been in a year. With domestic demand still shaky, the country is relying heavily on its strong export sector, which is fueling worries about deeper structural imbalances. Even though the 4.8% growth keeps China on track to hit its roughly 5% target for the year, there are real questions about whether that momentum can last, especially with U.S. trade tensions on the rise. Not very encouraging for those looking to China to sop up those floating barrels of oil.
This comes as the oil price structure is getting closer to a contango which signals an oversupplied market. Want to talk contango? Call Phil Flynn 888-264-5665. Yet global inventories other than the floating storage look relatively tight and we are in the bottom of the shoulder season. Bloomberg is reporting that more than 1.0 billion barrels have been amassed on the world’s tanker fleet, the biggest flotilla of oil in-transit since 2020.
International oil futures have sunk to a five-month low near $60.00 a barrel and traders are braced for a further slide, as crude cargoes from the Middle East are starting to go unsold. The International Energy Agency predicts a flood of supplies, with world inventories accumulating at a rate of 1.9 million barrels a day so far this year, and a potential record-breaking glut of almost 4 million barrels a day next year.
Natural gas on the other hand is starting to perk up as winter is starting to show up in parts of the country frost warnings in Wisconsin. Talk of snow in the north is giving chills to the natural gas bears this morning as the market gapped higher as the forecast turned decidedly colder.
Also, The Energy Information Administration (EIA) reports that Liquefied natural gas (LNG) export capacity across North America is set for significant growth, with U.S. exporters planning to more than double liquefaction capacity by adding approximately 13.9 billion cubic feet per day (Bcf/d) between 2025 and 2029. The U.S., already the world’s largest LNG exporter with 15.4 Bcf/d capacity, will concentrate new projects along the Gulf Coast, supported by additional pipelines, though supply risks remain due to potential construction delays. Key U.S. facilities under construction include Port Arthur LNG Phase 1, Rio Grande LNG, Woodside Louisiana LNG, Golden Pass LNG, and CP2 Phase 1. In Canada, the first LNG export terminal—LNG Canada—has begun operations in British Columbia, with plans to expand to 3.68 Bcf/d after 2029. Additional Canadian projects, Woodfibre LNG and Cedar LNG, are expected to start exports in 2027 and 2028, respectively, sourcing gas from the Montney Formation and offering faster shipping to Asian markets. Meanwhile, Mexico is building two LNG export projects—Fast LNG Altamira FLNG2 and Energía Costa Azul—totaling 0.6 Bcf/d capacity, both supplied by U.S. feedgas and marking Mexico’s entry into LNG exports. Altogether, North American LNG export capacity is poised to rise from 11.4 Bcf/d in early 2024 to 28.7 Bcf/d by 2029, representing over half of anticipated global additions during this period.
Stay Tuned to the Fox Business Network! Invested in you! Call to get the Phil Flynn Daily Trade Levels by calling me at 888-264-5665 or email me atpflynn@pricegroup.com.
Thanks,
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.
Questions? Ask Phil Flynn today at 312-264-4364