If I Could Turn Back Time. The Energy Report 11/01/2024

If I could turn back time, If I could find a way! The secret to comedy is timing. The same is true and commodity option trading and sometimes buyers are asking if they could turn back time just three and a half minutes because it was the difference between times running out.

And sometimes it is just a matter of minutes or seconds. The end of month call option an option that went worthless that if it has just a little more time would have had reached the stars if a headline that caused an oil price spike would have come out just minutes earlier.

Crude oil had a decent day as it mostly filled the void on the chart after the drop in price after Israel spared Iranian nuclear facilities and OPEC dropped hint that they would cancel but failed to reward those who bought 6950 or 7000 calls that would have been in the money if the market completed the process and traded back to the 7178 pre-Israeli attack close.

Sure, the oil had extremely bullish data in the weekly Energy Information Administration (EIA) report but lacked the momentum to completely fill the gap at the 1:30 central time close.

They did not seem to be aware of the risk that Iran might have the guts to retaliate against Isreal which many experts would be a death wish for the terror backing regime.

Yet just 3 minutes after the 1:30 Central time official settlement price that sealed the fate of the options expiration price, a headline that Iran was preparing major retaliatory strike from Iraq within days.

I am sure the timing of the headline release was just a coincidence.

Yet not surprisingly caused a price spike that filled the gap driving crude back over $7100 leaving some call buyers to ask what might have been if that headline had been released just three minutes earlier.

Yet the perception that after the Israeli attack that Iran’s oil infrastructure was going to be safe forever was shattered. Subtracting all the little war risk that was priced into oil now becomes a riskier proposition.

Now Israel says it is at ‘high level of readiness’ for Iranian attack.   Is real has already signaled that if Iran ever attacked Israel again the targets that were previously not attacked would be fair game in other words there is a high likelihood that if Iran is foolish enough to carry out this attack that Israel will take out its nuclear facilities as well as its oil production and export capabilities.

The Times of Israel reported that Iran will deliver a “definitive and painful” response to Israel’s recent attack on its territory, likely before the US presidential election on November 5, CNN reported Wednesday, citing an anonymous senior source. The source, apparently an Iranian with knowledge of deliberations in Tehran, told the network: “The response of the Islamic Republic of Iran to the Zionist regime’s aggression will be definitive and painful.”

It may also be painful for short sellers if Israel does take the gloves off and attack Iranian oil facilities.

Green Energy Update! “Bloomberg reports that Ford Motor Co. plans to shut down the Michigan factory that produces its F-150 Lightning plug-in pickup truck, its signature electric vehicle, through the end of the year as demand for EVs continues to wane. “

Bloomberg Also reported that The Environmental Protection Agency has approved a proposed Texas oil port capable of exporting 1 million barrels of oil a day, even as the terminals face increasing scrutiny from environmental activists, progressive lawmakers and local officials. In a letter from the EPA made public by opponents of the project Thursday, the agency said it “does not object to the issuance of a license” for Sentinel Midstream LLC’s Texas Gulflink Deepwater Port. The company, which is backed by private equity firm Cresta Fund Management, still needs final approval via a record of decision from the Transportation Department’s Maritime Administration. The decision is expected by December 12.

Natural Gas could not get traction after a bullish weekly report because weather forecasts turn warmer for November .

The EIA talked about the rise of associated gas that may lead to a supply glut if this winter is warm.

The EIA pointed out that natural gas produced from the three largest tight oil-producing plays in the United States has increased in the last decade.

Natural gas comprised 40% of total production from the Bakken, the Eagle Ford, and the Permian compared with 29% in 2014.

Combined crude oil and natural gas production from these plays more than doubled over this period as hydraulic fracturing—also known as fracking—and horizontal drilling have allowed producers to access and extract more crude oil and natural gas from tight formations.

However, production of associated natural gas, which is natural gas produced from predominantly oil wells, has increased more rapidly from these tight oil plays.
Natural gas production from these plays more than tripled—an increase of 22 billion cubic feet per day (Bcf/d)—over the period compared with crude oil output, which more than doubled—an increase of 4 million barrels per day (b/d).

In Europe of course they’re well supplied but keep in mind that it’s not just about storage if Europe gets a cold winter’s their supplies could be squeezed especially as Russia is playing hardball with Ukraine.

Russia’s President Vladimir Putin says he’s ready to an extended deal to allow Russian gas to flow through pipelines in the Ukraine assuming that Ukraine signed the contract that expires in December.

Russia is suggesting that Ukraine is refusing to sign the contract. This showdown is going to be something that we have to watch on the international market.

Oil and gas markets are going to be watching today’s unemployment report as well as the development surrounding the US presidential election, we could see some extreme volatility if the election is close, be prepared for big swings on both sides of this market but ultimately, we have a strong upward bias for the price of oil going into the end of the year.

Stay tuned to the Fox Business Network because they’re the only network in America that really is invested in you. And yes, you can still open your trading account with Phil Flynn by calling 888-264-5665 or you can e-mail me at pflynn@pricegroup.com.