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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

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Roll Out the Barrels. The Energy Report 10/16/2026

By On October 16, 2026 - 9:51 AM · In Market Commentaries, Phil Flynn Energy Report
Roll out the barrels and sooner rather than later. Oil is taking a pause after the International Energy Agency said Thursday that its members agreed to accelerate the release of around 100 million barrels of previously pledged emergency oil stocks, including more than 20 million barrels of diesel to be released as soon as possible. This came after the Trump administration made clear it was not very happy with the way the IEA and some European members had been seemingly slow-walking the agreed-upon rollout from the big March collective action.
The U.S. informed fellow IEA members in a very sweet way that current plans simply did not go far enough to calm rising fuel prices, with officials informally lobbying for an extra commitment of at least another 100 million barrels on top of what was already outstanding.
The Energy Department underscored that the administration continues to hold European nations accountable for failing to fully deliver on earlier commitments to ease global supply disruptions and help bring energy prices down.
That pressure, layered on top of the recent G7 call for faster action, appears to have helped shame the IEA Governing Board to agree yesterday to speed up completion of the remaining volumes (with about 330 million barrels already released from the original March pledge of more than 400 million, and some members already exceeding their shares so the total will top that figure eventually.
As an IEA member itself, the United States has already carried by far the largest share of the burden—pledging and largely delivering 172.2 million barrels from the Strategic Petroleum Reserve under the original March agreement (more than any other country, and the bulk of the overall ~426 million barrels ultimately pledged).
Those barrels have been structured as exchanges so the SPR is replenished later with a premium, at no net cost to taxpayers.
The market, however, largely viewed the diesel portion as an acceleration of existing pledges rather than a big new injection and this oil and diesel is need as is need as risk on supply remains.
 Talk of attacks on ships in the Strait of Hormuz continues, with maritime agencies reporting a recent surge—including a record weekly number of incidents, multiple vessels hit by projectiles, and a container ship sinking after a strike. Oil flows through the waterway have slowed again from their earlier recovery as Iran steps up pressure on unauthorized routes.
At the same time, Houthi attacks have widened, including a strike that caused a limited fire and damage at Saudi Aramco’s headquarters complex in Dhahran, alongside ongoing missile and drone activity targeting other Saudi sites. These persistent threats to shipping and infrastructure keep the geopolitical risk premium in place even as the IEA barrels start to roll out. And as I have been saying for m month’s the problem is diesel/ BLOOMBERG reported that at Accelerating crude exports through the Strait of Hormuz aren’t translating into higher production of dirty shipping fuel, according to a top Vitol Group executive, tightening supplies and sending prices soaring. They say that the Middle East conflict and Ukrainian attacks on Russian refineries have reduced fuel oil supply, with Vitol’s Asia head Kieran Gallagher saying refiners have been maximizing throughput to capture strong refining margins. Demand for HSFO as a refinery feedstock is adding to the squeeze, while the market for low-sulfur fuel oil is “more benign” due to exports from China and increased operating rates at Nigeria’s Dangote refinery.
Yet with the lifting of sanctions on tainted tankers yesterday the crack spreads did come down so there is a sign of hope that we’ll be able to move supply a little bit more efficiently and that should ease some of the pain.
Fox Weather is pointing out a sharp early-season cold snap that is already underway and set to intensify into the weekend on the Fox Weather ap and it may move Nat gas.
 They say that a powerful cold front is sweeping through the central and eastern U.S., driving temperature drops of 30–40 degrees in places. Highs that were in the 80s and even 90s earlier this week are tumbling into the 40s and 50s across the Northern and Central Plains and Upper Midwest, with overnight lows dipping into the 20s and 30s and the first widespread hard freezes of the season in parts of the Dakotas, Minnesota, Wisconsin, and Iowa. From Texas to New England, many areas will see their coldest air since spring by the end of the weekend, bringing a quick burst of heating demand after the recent unseasonable warmth. That cold shot is temporary.
Fox Weather  models show high pressure building back in next week, with above-normal temperatures returning across much of the eastern half of the country. The result is a classic shoulder-season pattern: a short-lived heating demand spike this weekend that should help trim the next storage builds, followed by milder conditions that limit sustained early-season withdrawals. Model divergence remains elevated (ECMWF still running colder than GFS in the 10–15 day window on parts of the Midwest and East), so weather risk is still two-sided, but the near-term picture is for only moderate national demand rather than a full early-winter rally.
The EIA storage report released yesterday for the week ending October 9 delivered a bullish surprise. Working gas rose by 67 Bcf to 3,567 Bcf. That was well below the five-year average build of roughly 90 Bcf and under most analyst estimates clustered in the mid-to-upper 70s Bcf. Stocks are now 45 Bcf (about 1.3%) above the five-year average but 143 Bcf (about 3.9%) below year-ago levels.
The smaller-than-normal injection narrowed the surplus versus the five-year average and widened the deficit versus last year, reflecting reduced production from residual Hurricane Isaias-related shut-ins, force majeures, and pipeline issues earlier in the month, along with solid LNG feedgas and residual power burn.
November natural gas settled at $3.236/MMBtu on Thursday after the report, up on the day. Early Friday trade has seen some give-back as the market digests the transient nature of the cold shot and the expectation of continued injections over the next few weeks under milder weather. Lower 48 production has been running below the August–September records (around 110–111 Bcf/d so far in October versus 113+ Bcf/d previously), which has helped support prices even as overall demand stays muted outside of this weekend’s chill. The storage print was constructive and confirms the market is not building inventories as freely as feared heading into the end of the injection season.
But with Fox Weather’s cold front looking short-lived and longer-range forecasts still leaning toward milder-than-normal conditions through late October, the bulls will need sustained colder weather or further production restraint to push prices meaningfully higher from here. Watch the weekend cold and next week’s model updates closely—the transition from shoulder season to real heating demand is still the key driver. The best thing to do is download the Fox Weather ap and to stay tuned to the Fox Business network. Also make sure you get my wildly popular daily trade levels on all major markets with some option plays and you can open  an account with Price Group by calling me at 888-264-5665 or email me at pflynn@pricegroup.com.

Thanks,

Phil Flynn

Senior Market Analyst & Author of The Energy Report

Contributor to FOX Business Network

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