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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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At Least Someone Is Happy. The Energy Report 10/21/2026

By On October 21, 2026 - 9:32 AM · In Market Commentaries, Phil Flynn Energy Report
There are a lot of people and even Republicans that are unhappy with President Trump reaching out and negotiating with Russian President Vladimir Putin, but I now at last one person that is verry happy about it. Fox News is reporting that Russia has released Michigan native Stephen Hubbard, a retired teacher sentenced to nearly seven years in prison on mercenary charges, following appeals from President Donald Trump.
 And while some believed that Vladimir Putin is just using this prisoner release as a device to improve his image and negotiating leverage in the war against Ukraine, I can assure you that Mister Hubbard is breathing a sigh of relief.
And despite the big spike up in oil yesterday talk of a peace deal that brought us back down with Iran there is at least somebody who is making a big bet that oil prices are getting ready to crash back below prewar levels. The big trade crude for the $70 put and it isn’t subtle.,
Now of course there have been many bulls that have been frustrated that oil prices haven’t been significantly higher and we have heard conspiracy theories that some of these manipulating the price is lower well in this particular case if somebody indeed knows something it’s going to be very interesting trade and at the very least it’s limited risk.
Technically, it isn’t crazy on paper. WTI has already traded near $70 earlier this year before the geopolitics shoved it back toward $110.
The market has been range-bound on a massive scale, and once the fear premium starts to leak, the path of least resistance can be lower fast.
 Overbought conditions after the spike, and the sheer size of that put position, can feed on itself if the headlines turn. A break of the recent support zones and the $100 area would open the door for a deeper correction—exactly the kind of move those $70 strikes are positioned for.
Against the backdrop of Russia-Ukraine talks and the endless Iran rumors, the bears see a path. Trump’s energy ceasefire talk, diesel deals, and partial sanctions waivers keep the idea alive that more Russian barrels could eventually hit the market if the shooting eases on energy infrastructure.
Same script on Iran. Yesterday’s reports out of Pakistan had mediators floating the idea that Tehran might allow weapons inspectors (or at least secret IAEA access) and that a deal was close. Then the usual walk-back: Iranian officials saying not a gram of enriched uranium leaves, no talks until Washington meets their conditions, and later reports that talks are ongoing on the US side but a deal is not close.
 Same noise from Hong Kong and elsewhere. The market has heard this song before. Every time the peace talk bubbles up, the risk premium gets a haircut—even if the actual deal stays stuck.
 Whether that $70 print happens by expiration is another story. The position only gets paid if the geopolitics unwind hard and the technicals follow. The bulls can keep pointing at inventories and ongoing tensions all they want. This size of put buying only works if oil dumps. Target $70.
This big bearish bet on oil fits with a broader bearish scenario, especially if Fox Weather projections for a warmer-than-normal winter hold up. The Fox weather ap is Talking Super El Nino soft winter and happens as The International Energy Agency is releasing more barrels of oil and is accelerating those releases after President Trump added pressure.
IEA members agreed to speed up the remaining roughly 100 million barrels from the March emergency pledge—about 330 million of the original 400 million have already been released—including more than 20 million barrels of diesel as soon as possible, aimed at easing high diesel prices.
Yet despite longer-term bearish possibilities, the short-term market today is focused on concerns that Iran talks are not going well and that supplies remain tight after a bullish API report. Headlinescarried comments from Iran’s foreign minister, who said: “Given that the US has shown no willingness to reach an understanding, there is little reason to expect progress now,” according to the Financial Times. The minister also stated, “We are ready for diplomacy, but will defend ourselves,” per the FT.
 This follows the bullish /American Petroleum Institute’s report that crude oil inventories fell by 4.93 million barrels in the week ending October 16—larger than the roughly 1.3-million-barrel draw expected and coming after the prior week’s steep 11.12-million-barrel decline. Gasoline stocks dropped 2.0 million barrels and distillates fell 2.6 million barrels, while Cushing inventories rose 0.9 million barrels and the SPR declined by 300,000 barrels. These API draws keep U.S. product supplies looking tight heading into winter. However, the accelerated IEA releases—particularly the focus on diesel—add supply to the market at a time when a milder winter could curb heating demand. Let’s hope so.
The EIA weekly petroleum status report is due later this morning and will give official confirmation. On top of that today traders are going to be watching Fox and Friends as Ukrainian president Vladimir Zelensky is going to make his case.
The Trump administration is offering to loan up to 315,000 barrels—nearly a third—of the 1-million-barrel Northeast Home Heating Oil Reserve from sites in Maine, Massachusetts, and Connecticut. Deliveries targeted by Nov. 13 through competitive bidding to retailers and terminals. Heating oil in New England is near $6/gallon (up ~75% year-over-year) and diesel has hit records above $6.30–$6.50 on Iran war and Ukraine disruptions.
The reserve has been used only once since Hurricane Sandy.
The bottom line: 315,000 barrels is a small volume relative to Northeast winter demand and commercial stocks. It may ease local tightness and shows the administration is responding, but it won’t rebalance the market or sustainably lower prices. Root issues remain geopolitical supply risks and tight distillates. Further releases under evaluation.
Natural gas is lower again as Fox Weather reports a mild stretch for much of the country, and the market is losing patience waiting for winter. The prompt contract slipped below $3.00 on Tuesday on warmer forecasts and expectations that storage injections could keep coming well into November. With heating demand nowhere in sight, the bulls are paying for every day they hold on.
Supply isn’t helping. Appalachian gas came back online after the Columbia Gas Transmission force majeure ended. Even record LNG feedgas demand was not enough to offset that returning supply on Monday. Early estimates call for a 75 to 78 Bcf storage build in this week’s EIA report, which gives buyers very little to work with.
The big story is El Niño. Traders are piling into bearish bets that a powerful El Niño keeps the winter mild and curbs heating demand. NOAA’s winter outlook favors above-normal temperatures across the northern U.S.
Still, a crowded trade is a dangerous trade. Henry Hub open interest hit a record of more than 1.8 million contracts on September 1, and one good Arctic blast could send those shorts running for the exits. El Niño winters can still deliver nasty cold snaps, and LNG exports are sucking up record amounts of gas. It might be time to look at some of these just in case out of the money natural gas calls going into winter just in case we get caught by surprise.
So make sure you download your Fox Weather app, because that way you can stay ahead of all the news. You should also stay tuned to the Fox Business Network because it is the only network in America that is truly invested in you. Call Phil Flynn at 888-264-5665 or email pflynn@pricegroup.com to open an account and get the trade levels, options strategies, and market insight you need to trade the energy markets. Make sure to watch Phil on the Fox Business Network, and sign up for the Phil Flynn Energy Report at The Price Futures Group.

Thanks,

Phil Flynn

Senior Market Analyst & Author of The Energy Report

Contributor to FOX Business Network

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