Counter Proposal. The Energy Report 06/09/2025

Reuters reported that Iran will soon hand a counterproposal for a nuclear deal to the United States via Oman, Iranian foreign ministry spokesperson Esmaeil Baghaei said on Monday, in response to a U.S. offer that Tehran deems “unacceptable”. The spokesperson also called on the international community to force nuclear disarmament upon Israel, Iran’s longstanding foe which Tehran says is trying to thwart the nuclear negotiations according to Reuters.

It’s not surprising that Iran is trying to appeal to the international community which has a historic dislike of Israel for whatever reason. Critics of the ongoing negotiations between Iran and the United states might suggest that Iran is trying to buy time to rebuild their arsenal and air defenses. President Trump is doing everything he can to avoid a war. He’s taking that extra step so now let’s see if Iran’s leadership decides to grab that olive branch or if they’ll have to hunker down for an attack.

The US-China trade talks that are going on in London are going to be critical. Any sign that progress is going to be made will give a bit of a boost and right now we’re seeing a little bit of optimism being built into the price.

Geopolitical factors are influencing recent events. Bloomberg reported that Ukrainian drones struck Russian research and production facilities supplying missile components. Reports indicate Ukraine’s strikes have impacted military targets, while Russia has responded by targeting civilian areas. What’s wrong with this picture here?

The market also seems to be putting into perspective the OPEC plus production increase. Yes, we remember people were predicting that OPEC plus was going to increase output by more than the 411,000 barrels a day that they actually agreed to. This hike is really part of a broader plan to reduce the 2.2 million barrels a day of voluntary cuts that they put into place in November 23. Yet instead of signaling the price war, the cartel is saying that they are going to be flexible. OPEC plus said they could reduce and remove the hikes if it appeared that oil prices would fall below $60.00 a barrel.

Even though the group agreed to unwind some of the cuts, other producers had been promising compensation cuts. One of the biggest cheaters in the cartel is Iraq and they must compensate for 1.93 million barrels a day of overproduction. Others have been overproducing by 1.3 million barrels a day. If these countries reverse their overproduction, that is going to be a net loss of barrels not a net increase of barrels.

Considering that backdrop we would expect to see prices have a bit of a firming and it appears that finally we’re breaking out to the upside of the trading range which should give us a little bit more upward momentum.

Gasoline prices at the pump have decreased to $3.124 per gallon, which is significantly lower than the $3.448 per gallon recorded a year ago. President Trump has fulfilled his promise to reduce gasoline prices. Although he may not receive widespread recognition, it is evident that his policies have contributed to the decline in prices. This includes reducing regulations, streamlining projects, and maintaining a stable geopolitical stance that alleviates concerns in the oil market about global conflicts escalating. Consequently, we are observing a reduction in the risk premium, which is noteworthy given the current volatile global environment. This demonstrates that when the United States projects strength, the likelihood of conflict decreases.

It is advisable to start developing long-term strategies for oil and gas. Followers of the Phil Flynn Daily Trade Levels can also benefit from the intraday swings, whether they are extreme or moderate. And when we look at the different variables on the trade levels, some of the volatility gives us more than one entry point based on the changing dynamics.

Natural gas futures are paying attention to the Fox Weather Channel as they have seen their forecast shift for hotter June 11th to the 15th particularly in the South and northeast which should boost expected demand for natural gas from power plants for air conditioning. Last week the lower 48 dry gas production came in at 106.1 BCF that was up 4.6% year over year and down 0.8 BCF from the week. Before last week we saw an increase of 98 billion cubic feet in storage which has exceeded expectations. This week we’re looking for an even bigger increase of 108 BCF but if the heat comes in as the Fox Weather Channel predicts, we could start seeing those numbers change pretty dramatically.

EBW Analytics reported the lowest LNG feedgas since January, with Henry Hub spot prices falling to $2.68/MMBtu on Friday, down $1.11/MMBtu from the July contract. Despite this, technically there is a bullish trend, and Plaquemines hit a record LNG feedgas over the weekend. However, growing storage surpluses before summer may lead to lower prices later in the injection season if bearish factors arise.

Fox Weather reported that, “Particularly Dangerous Situation” Severe Thunderstorm Watches were issued in Texas and Oklahoma on Sunday. In Texas, a 100-mph wind gust was recorded in Goree, and near-grapefruit-sized hail fell near Claude. The powerful storms brought hurricane-force winds and large hail, causing power outages for tens of thousands of people. NOAA’s Storm Prediction Center warned about a potential derecho in North Texas overnight, but the FOX Forecast Center confirmed it did not occur.

To stay updated with the latest weather information, you can download the Fox Weather app. Additionally, you can tune into the Fox Business Network for business news.

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