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Base Cases and Sanctions Delay. The Energy Report 10/28/2025

By Phil Flynn On October 28, 2025 - 8:54 AM · In Market Commentaries, Phil Flynn Energy Report

Oil prices pulled up with a quick U-turn, slipping 1% on Monday as traders cashed in profits after sources said OPEC is gearing up for a modest production hike at their next gathering. Meanwhile, the Trump administration is reportedly floating the idea of giving Rosneft Deutschland a temporary, non-renewable license—possibly pushing back sanctions for six months and easing fears about a tight diesel market. As if that weren’t enough, Russia’s Lukoil is making moves to offload its international assets to sidestep sanctions. It’s a whirlwind of action on the global energy stage as the market adjust to more Opec oil, delayed sanctions against the optimism of a US China trade deal.

Trump isn’t mincing words when it comes to Russia. “I am not going to be wasting my time” by meeting with Russian President Putin, the U.S. President declared, making it clear that any summit is off the table until Moscow shows it’s ready for peace. Yesterday’s stance sends a firm message amid ongoing geopolitical tensions, reinforcing that dialogue will have to wait until Russia changes its tune. Yet the President is already changing the tune a bit when it comes to sanctions enforcement.

This comes as Bloomberg reports that China strengthened its trade agreement with Southeast Asian nations through CAFTA 3.0, aiming to reduce trade barriers, promote green economy initiatives, and support supply-chain connectivity. This move is also intended to boost Chinese exports amid US tariffs.

OPEC+ looks set to make another cautious move, with chatter indicating they’re eyeing a modest bump in oil production when the heavy hitters meet this weekend. Sources from inside the room say the group is likely zeroing in on a third straight monthly increase—about 137,000 barrels a day, to be hashed out during their Nov. 2 video conference. This is just another step in their plan to gradually bring back 1.66 million barrels a day to the market. But before any final decision is made, all eyes are on the outcome of those crucial US-China trade talks, plus the usual suspects: the ebb and flow of global crude prices and the impact of fresh US sanctions on Russia—a major player in OPEC+ and the global oil game.

The Trump Administration is approaching the challenges of increasing AI-related energy demand and other uses of this historic life changing technology with new strategies. The US Department of Energy is constructing two supercomputers and has initiated a $1 billion partnership with AMD. Reuters reported that the U.S. has formed a $1 billion partnership with Advanced Micro Devices to construct two supercomputers that will tackle large scientific problems ranging from nuclear power to cancer treatments to national security, Energy Secretary Chris Wright and AMD CEO Lisa Su told Reuters.

The U.S. is building the two machines to ensure the country has enough supercomputers to run increasingly complex experiments that require harnessing enormous amounts of data-crunching capability. The machines can accelerate the process of making scientific discoveries in areas the U.S. is focused on.

The upcoming COP30 Climate Summit may see world leaders debate and possibly set global targets for sustainable biofuel production, marking a significant step in international climate action efforts. In Mozambique, TotalEnergies and its partners are nearing the restart of construction on their $20 billion LNG project, signaling renewed momentum in energy infrastructure development.

On the policy front, there’s plenty of buzz swirling around Washington as Treasury Secretary Bessent whittles down the shortlist for the next Fed Chair. The names on the board—Waller, Warsh, Hassett, Bowman, and Rieder—are fueling speculation and setting traders on edge ahead of a marathon week packed with central bank fireworks. We’re talking rate calls from the Fed, the ECB, and the Bank of Japan all crammed into the same week—so buckle up, folks, volatility could be the name of the game.

Meanwhile, in the latest twist on the global energy chessboard, Japan’s Finance Minister Katayama made the trip to sit down with Secretary Bessent, hashing out the thorny issue of Russian LNG imports. It’s a stark reminder that geopolitics and energy markets are still dancing a complicated tango, with international deals and diplomatic maneuvering driving the headlines and shaping the market’s next moves. Call Phil Flynn to open your trading account at 888-264-5665. My traders are getting my Daily Trade Levels that are available to you as well.

Natural gas prices have experienced a temporary pullback, though EBW Analytics maintains a positive long-term outlook contingent on the anticipated colder Northern winter weather materializing. According to EBW, November natural gas rose by 13.8¢/MMBtu on Monday, with gains concentrated at the front end of the curve; December through March were up by just 0.3¢. With December set to become the front-month contract, further volatility is expected.

Liquefied natural gas (LNG) exports achieved another record over the weekend as Plaquemines reached 3.8 Bcf/d. While Calcasieu Pass and Corpus Christi displayed some weaknesses, seasonal factors and potential improvements suggest additional upward momentum remains possible. However, Lower 48 storage levels continue to trend toward 3,925 Bcf, supported by record Canadian inventories and recovering production rates. Despite strong bullish fundamentals for the long term, substantial supply increases in the near-to-medium term present bearish risks.

Winter weather conditions will be the main determinant of price movements in the months ahead. Nonetheless, robust underlying market fundamentals and asymmetrical upside potential—should natural gas surpass $4.50—indicate that any short-term weakness may precede renewed strength in mid-to-late winter.

The Fox Weather Channel has been warning about a colder winter but now the focus is on Jamica. Hurricane Melissa is the third Category 5 hurricane this season, a first in 20 years The last time the Atlantic hurricane season produced more than two Category 5 storms was in 2005. However, that year saw 28 named storms. This year, there have been 13 named storms, with three reaching Category 5 strength. FOX Weather Hurricane Specialist Bryan Norcross says this is “extraordinary.”

Download The Fox Weather Ap to keep up with the storms and weather. Stay tuned to the Fox Business Network. Call Phil Flynn to open your account at 888-264-5665 or email pflynn@pricegroup.com.

Thanks,

Phil Flynn

Senior Market Analyst & Author of The Energy Report

Contributor to FOX Business Network

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