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Global optimism is on the rise as a historic peace deal brokered by President Donald Trump between Israel and Hamas, along with the glorious release of hostages, is giving the market a sense that almost anything is possible. For Our Lady of Fatima fans and the prophecies, it coincidentally comes on the anniversary of the Miracle of the Sun. At the same time, the concerns that caused the market to tank late in the day on Friday over a potential U.S.-China trade war seem to have faded.

President Trump said maybe President Xi was just having a bad day. Yet, this morning on Fox Business’ “Mornings with Maria,” U.S. Treasury Secretary Scott Bessent moved the market with his comments by telling MariaBartiromo that, “We have aggressively pushed back against China’s export controls.”

U.S. Treasury Secretary Scott Bessent emphasized that China will neither command nor control the United States. He mentioned that there would be numerous staff-level meetings to address these issues and noted that there had been substantial communication with Chinese officials over the weekend. Bessent also described China’s recent actions as provocative, underlining the seriousness with which the U.S. is approaching the situation. U.S. Treasury Secretary Scott Bessent told Maria Bartiromo that he believes China is willing to engage in discussions regarding trade issues. However, he emphasized that if China is not receptive, the United States possesses significant options and could respond even more assertively than China has seen so far. He made it clear that all possibilities are being considered and expressed confidence that tensions can be reduced.

While avoiding a trade war with China, particularly over oil, is a positive development, ongoing concerns about market oversupply due to increased OPEC production have kept sellers active. Nonetheless, I believe these worries about OPEC’s output may be exaggerated. In fact, today at the Energy Intelligence Forum, Saudi Aramco CEO Amin Nasser stated that oil consumption is expected to increase by approximately 1.2 million to 1.4 million barrels per day in 2025 and 2026, and described current market fundamentals as strong. So in other words, OPEC is not seeing any sign of a surplus and in fact, based off their numbers, we could actually see a bit of a deficit.

Also, the Ukraine attacks on Russian oil infrastructure is taking its toll. Reuters reported that (Reuters) – Russia’s seaborne oil product exports fell 17.1% in September from August to 7.58 million metric tons due to less fuel production as various refineries were impacted by drone attacks, data from industry sources and Reuters calculations showed. Several major refineries were attacked by drones in August and September, including Surgutneftegaz’s Kirishinefteorgsintez refinery, Lukoil’s (LKOH.MM), Volgograd refinery and Rosneft’s Samara group of refineries.

Well we have to acknowledge seasonal weakness. For further discussion call Phil Flynn 888-264-5665. The underlying fundamentals looked very solid at this point. Price wise we have to respect the chart, but we think that this recent weakness could be an opportunity to lock in hedges going into winter.

Natural gas prices are trying to recover and have been on both sides of unchanged. The debate in the market is whether record production in the United States is going to overcome record demand. At the same time, weather fluctuations could have a major impact on the answering of that question. Fox Weather is reporting that State of emergency declared in New York City as nasty nor’easter slams Northeast with powerful winds, flooding. The nor’easter first slammed areas of the Southeast and Carolinas over the weekend, dumping several inches of rain and producing tropical-storm-force wind gusts from an already-battered North Carolina coast up to the Jersey Shore.

Natural Gas Intelligence reports that colder winter weather may strain Europe’s natural gas supplies. Recent Russian attacks have cut more than half of Ukraine’s production, potentially tightening the European LNG market. EBW Analytics noted natural gas surged 22.6¢ early last week due to bullish weather, low production, and strong Gulf Coast LNG demand, but then dropped 44.4¢ (-13%) after hitting a double-top at $3.55/MMBtu. Despite supportive supply and demand shifts, high storage (headed for 3,900 Bcf) and mild October weather have kept prices bearish. Structural fundamentals are positive long-term, but short-term volatility is expected. 

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