Oil prices that were surging took a Goldman Sachs dip after the investment house signaled that they think the Federal Reserve of the United States will raise rates by 50 basis points at its meetings in May and June, says Phil Flynn of the PRICE Futures Group.

The report that came out in the wee hours of the morning caused a spike in the dollar and a drop in the oil market, probably giving Goldman a good chance to buy in.

The war in Ukraine is continuing. The EU is looking to potentially ban Russian oil. There is still Russian oil going into Germany and they are a little bit reluctant to cut off supplies completely, not so much for the oil but because of the concerns that Russia might then cut off their natural gas supply.

As we have stated many times before, bad energy policy in Germany and Europe has emboldened Vladimir Putin to make war on Ukraine. Putin believes that energy can be a weapon of last resort, and for a guy who’s using hypersonic missiles to show just how tough he is—because bombing schools and hospitals and shopping up malls didn’t prove it—his next ploy may well be to cut off natural gas supply. Though he might not be tough enough to do that because he needs the money.

Fox News reports that Saudi Arabia said Monday that it will not accept blame for any international oil shortages after multiple Saudi facilities were targeted over the weekend by Yemen’s Iran-backed Houthi rebels. The Saudi press agency cited an official, unnamed source in the kingdom’s Ministry of Foreign Affairs in relaying a statement that the world’s largest oil exporter “will not incur any responsibility for any shortage in oil supplies to global markets in light of the attacks.”

Saudi Arabia is not taking responsibility for higher energy prices mainly because of the Iranian backed Houthi rebels. They continue to bomb their energy infrastructure and while the damage is minimal, it is really a statement that sends a signal to the Biden administration to not follow through with an Iranian nuclear deal. How can you deal with Iran as they continue to attack their neighbor with drones and missiles, and poses a threat to the global economy by taking out Saudi Arabia’s energy infrastructure?

The Wall Street Journal in a must-read reported, “The effort to revive the 2015 nuclear deal agreement now hinges on perhaps the most politically sensitive issue in the negotiations: whether to remove the US terrorism designation for Iran’s elite Revolutionary Guards, the country’s powerful security force, diplomats said." The issue is galvanizing opposition to the nuclear deal in Washington and among Middle East allies such as Israel, where the government issued stinging public criticism of any attempt to remove the terrorism designation of the Islamic Revolutionary Guard Corps. Stay Tuned as this is a downside risk for oil.

We get the API tonight! Look for a build of oil because of SPR release but a draw on products.

Natural gas should be bought in the summer months. Options are thin but they should be looked at.

Learn more about Phil Flynn by visiting Price Futures Group.