Image Source: Unsplash

News of a Trump-brokered peace deal between Israel and Hamas is affecting global markets, as US oil demand soared last week to its highest level since December 2022 and specter of lower interest rates that should boost economic growth and demand for oil.

Surging gold and silver prices took a bit of a break after the news and oil and stock prices rose after the announcement of a deal to free the Hostages , brokered by President Donald Trump. The agreement will result in the release of Israeli hostages as early as Saturday. Meanwhile, demand for oil and related products continues to increase, which may affect future prices.

And here’s the exciting data: the EIA just reported that total weekly petroleum products supplied—a stand-in for U.S. oil consumption—climbed last week to 21.99 million barrels per day. That’s the highest since December 2022!

Yet the Peace Deal Between Russia and Ukraine is proving to be more allusive. Reuters reported that a top Russian diplomat said the impetus to reach a peace deal with Ukraine was largely exhausted. Analysts have said a peace deal would likely allow more Russian oil to flow to global markets. Russia was the second-biggest crude producer in the world after the U.S. in 2024, according to U.S. energy data. Reuters also reported that, “despite sanctions, Russia has been gradually raising oil production and was close last month to meeting its OPEC+ output quota, Deputy Prime Minister Alexander Novak said on Wednesday, the Interfax news agency reported.

Yet despite surging US demand there are still some people that are making what John Kemp notes are that U.S. Gulf Coast crude inventories rose by 6 million barrels in the week ending October 3 and have increased by 15 million since June 20—contrary to the usual ten-year seasonal drop of 13 million. Kemp says that currently stocks sit 10 million barrels (4% above average) higher than normal, reversing a previous deficit of 18 million barrels. As Gulf Coast facilities are linked to the global crude market, these rising inventories, according to Kemp, indicate an ongoing surplus.

Yet at the Cushing, Oklahoma delivery point stocks are falling to just 22.7 million barrels and overall US total oil inventories are 4,203 million barrels, about 4% below the five-year average for this time of year. 

The oil market is debating whether Gulf Coast stocks signal slowing demand or if rising U.S. demand means more oil will be needed. Recent export surges add to the uncertainty, keeping prices in a tight trading range. With potential Fed rate cuts and economic optimism, there is greater risk for an upward breakout than for oversupply. The real indicator will be inventory levels once shoulder season ends and demand increases. Clients can also take advantage of the trading range, and the trade levels are available. Call Phil Flynn at 888-264-5665 and we’ll discuss it.

Let Oil Freedom Ring! Big news from Capitol Hill! The Senate haspassed the Declaration of Energy Independence Act (H.R. 526)—a game-changing move that marks a bold turnaround from Biden era anti-energy policies and a rebuke to the former President that saw America gas station owners, fossil fuel producers and pipeline workers as war profiteers and price gougersand wanted them to find new jobs as he tried to bury their industry.

This historic bill cuts federal royalty rates for onshore oil and gas leases from 16.67% to 12.5%, wipes out those pesky $75 “expression of interest” fees that blocked progress, and brings back noncompetitive leasing for untapped reserves. America is putting its energy future back in its own hands! No more heavy-handed vintage and politically motivated restrictions that drove up utility bills by $400+ a year and handed control to foreign competitors. This bill will help us reclaim energy dominance: unlocking Alaska’s ANWR treasures, making LNG exports easier, and making lease sales a top priority instead of letting red tape slow us down. The difference is clear—when America leads, America prospers!

Natural gas prices took a huge tumble as the weather forecast for a cold start are starting to change. Another blast of warmer than normal temperatures took away some of the initial concerns that supplies would be tighter than anticipated. Today the key will be the natural gas inventory report that comes out at 9:30a central time. Traders want to see if the production numbers in the US start to level off and whether or not the demand continues to be higher than expected.

Yet Today Fox Weather is reporting that a powerful area of low pressure is expected to develop along the East Coast this weekend and pack heavy rain, high winds and bring coastal flooding to the Carolinas, mid-Atlantic and potentially other parts of the Eastern Seaboard. The coastal storm will likely be of the nor’easter variety, meaning it will pack strong winds that blow from the northeast and heavy precipitation. Fox Weather is reporting that anywhere from the Carolinas to southern New England is at risk of being impacted by the potentially strong coastal storm beginning Friday. Days of heavy rain, high winds, dangerous rip currents and high surf are likely if the storm develops as expected.

More By This Author:

Tighter Than You Think - The Energy Report
If Demand Is Bad Why Are Refining Margins So Good? - The Energy Report
California Gas - The Energy Report