Liberation Day 2. The Energy Report 04/02/2026

As oil soars overnight after President Trump’s speech on fears of an extended military campaign, the reality is that the President did not say anything new, and the market is ignoring the most important part and that is Operation Epic Fury was “nearing completion”. 

Sure, the President did say that U.S. forces would “hit them extremely hard over the next two to three weeks” and “bring them back to the Stone Ages, where they belong”  and that America would “finish the job”  which is what the President should and will do. The President also made no mention of moving to boots on the ground, which should ease fears not raise them.

Yet after the speech Wall Street trembles and uncertainty swirls, the panicked reaction in the markets is yet another case of the herd overplaying its hand. Critics are quick to shout that President Trump’s campaign to end nearly half a century of Iranian terror is reckless, but they miss the far bigger picture: this is a pivotal moment, not just for global security, but for the millions suffering under oppression in Iran.

Watching the market’s knee-jerk panic, I can’t help but recall the wild swings and dire predictions that accompanied President Trump’s first Liberation Day. Back then, many economists and armchair critics lined up to declare financial Armageddon. Recession! Inflation! The sky was supposed to fall. Yet here we are, one year later—Liberation Day’s anniversary—and the world hasn’t ended. In fact it has prospered. Maybe now is the perfect moment to revisit the message I wrote a year ago on the first Liberation day when I appealed for cooler heads like I am today.

I wrote Apri 2 2025:

Today Is Liberation Day! I am apt to believe that it will be celebrated by succeeding generations as the great anniversary festival. It ought to be commemorated as the day of deliverance by solemn acts of devotion to God Almighty. It ought to be solemnized with pomp and parade, with shews, Games, Sports, Guns, Bells, Bonfires, and Illuminations from one End of this Continent to the other from this Time forward forever more.

You will think me transported with Enthusiasm, but I am not. — I am well aware of the Toil and Blood and Treasure that it will cost us to maintain this declaration and support and defend these States. — Yet through all the Gloom I can see the Rays of ravishing Light and Glory. I can see that the End is more than worth all the Means. And that Posterity will triumph in that Day’s Transaction, even although We should rue it, which I trust in God We shall not.

The war for real free trade has begun, and as our second President and Founding Father, John Adams reminds us that Freedom and Free trade must be won at some cost. President Adams made those comments when our freedom was far from assured, and it should also be put in perspective that the fears of a trade war having a devastating impact on stocks and inflation are generally hyped and misguided.

America has faced tougher challenges and prevailed. The United States will win this trade war, and President Trump’s plan to remove unfair trade restrictions, protect intellectual property rights, eliminate waste and fraud, reduce the deficit, and cut unnecessary regulation costs will strengthen the economy and put us in a better position to compete in the new artificial intelligence economy.

Economists can debate the benefits and the pitfalls of tariffs and trade wars; however, historically, tariffs have not resulted in inflation. Free trade has enabled consumers to benefit from lower-priced goods from other countries. However, unfair practices such as intellectual property theft and dumping commodities backed by exploited labor have distorted the market and harmed businesses that cannot compete against these practices. President Trump aims to level the playing field for fair competition among all parties rather than implementing protectionism.

Should we stand idly by as we see that Ross Perot was right when he said,

“We have got to stop sending jobs overseas. It’s pretty simple: If you’re paying $12, $13, $14 an hour for factory workers and you can move your factory South of the border, pay a dollar an hour for labor, have no health care—that’s the most expensive single element in making a car— have no environmental controls, no pollution controls and no retirement, and you don’t care about anything but making money, there will be a giant sucking sound going south. When [Mexico’s] jobs come up from a dollar an hour to six dollars an hour, and ours go down to six dollars an hour, and then it’s leveled again. But in the meantime, you’ve wrecked the country with these kinds of deals.”

Should we stand by as global elitists look to the US to piggy bank their agenda with taxes, and the green deal scam cash? Is that not taxation without representation? While I’d prefer a world with free trade, we can’t always just pretend that we have it when we don’t.

Back to today, US oil is well supplied and demand is great. U.S. commercial crude oil inventories, excluding the Strategic Petroleum Reserve that just added 5.5 million barrels last week, pushing total crude oil inventories up to a solid 461.6 million barrels. That puts us a healthy 0.1% above the five-year average for this time of year—right where we want to be!

On the product side, motor gasoline inventories dipped a modest 0.6 million barrels, but we’re still sitting comfortably 4% above the five-year average. Finished gasoline stocks rose while blending components pulled back slightly—classic seasonal balancing in action.

Distillate fuel inventories came down 2.1 million barrels, landing us 3% below the five-year average. Nothing alarming here—demand is clearly firing on all cylinders! Propane/propylene inventories had a big week, surging 4.1 million barrels higher. We’re now an impressive 71% above the five-year average—plenty of supply to keep farmers’ fields dry if needed.

Overall, total commercial petroleum inventories eased by 2.1 million barrels, but the bigger picture tells a much brighter story. Demand is roaring. Over the past four weeks, total products supplied averaged 20.9 million barrels per day—that’s a confident 4.2% increase compared to the same period last year.

Motor gasoline demand averaged 8.9 million barrels per day, up a solid 1.3% year-over-year. Distillate fuel demand jumped 5.6% to 4 million barrels per day. Jet fuel was the only soft spot, down 3.5% from last year’s four-week average.

Bottom line: Inventories are holding steady near historical norms while demand continues to show real strength. The U.S. energy machine is running efficiently and ready for whatever comes next! Oil traders have to be ready to react to the next headline and traders may be especially nervus as many traders head out for Easter!

As far as the Strait of Hormuz China is starting to worry. As they should. Reuters reports that China’s state planner has instructed independent refiners to maintain crude processing rates at or above their two-year average, aiming to protect domestic fuel supply.

This directive comes as smaller refiners were expected to reduce operations in April, following a spike in oil prices caused by the U.S.-Israeli conflict with Iran and ongoing weak domestic demand.

Reuters also reports that Iran has assured the Philippines safe passage for Philippine-flagged vessels, fuel, and Filipino seafarers through the Strait of Hormuz, following discussions between Philippine Foreign Minister Ma. Theresa Lazaro and her Iranian counterpart Abbas Araqchi about energy supply and seafarer safety.

U.S. gasoline prices have climbed to $4.06 a gallon nationally — the highest since 2022 — but White House Press Secretary Karoline Leavitt made it crystal clear yesterday that these increases are temporary. She said, “We’re going to see prices at the pump go back down,” and the administration is laser-focused on keeping them as low as possible while finishing the job.

On the supply side, we’re already seeing more ships granted permits and moving through the Strait of Hormuz. That’s a positive development that could ease the immediate choke-point pressure. And let’s not forget — President Trump is the ultimate negotiator. He knows how to get deals done fast, and history shows when he sits at the table, energy flows and prices come down quicker than the skeptics thought they could.

Natural gas is trading around $2.85 this morning ahead of today’s EIA storage report (due out at 10:30 a.m. ET). After last week’s 54 Bcf draw, analysts are looking for the first modest injection of the shoulder season as we flip the calendar to April.

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