Oil prices are falling after a reversal in the odds for rate cuts that overshadowed geopolitical risk factors that seem to be boiling over, exclaims Phil Flynn of PRICE Futures Group.

The headline job numbers showed 353,000 nonfarm payroll jobs and unemployment falling to 3.7%. Now even though a strong jobs number should bode well for demand, fears remain. The Fed can cut rates and ongoing concerns about a regional bank crisis and a surging dollar keep oil prices calm. This came as reports that Hamas is set to reject the Gaza hostage and ceasefire deal proposed in Paris last week, Saudi outlet Al-Arabiya reported.

The market also seems immune to the risk concern as the US retaliates against Iranian-backed terror groups in well-choreographed attacks. Reuters reported that the United States intends to launch further strikes at Iran-backed groups in the Middle East, the White House national security adviser said on Sunday, after hitting Tehran-aligned factions in Iraq, Syria, and Yemen over the last two days.

Reuters reported that two Ukrainian attack drones struck the largest oil refinery in the country’s south on Saturday, a source in Kyiv told Reuters. It’s the latest in a series of long-range attacks on Russian oil facilities which has reduced Russia’s exports of naphtha, a petrochemical feedstock. Lukoil, which owns the 300,000 bpd Volgograd refinery, later said the plant was normal.

One country that may be upset that Biden has paused reviews of new LNG export terminals maybe Germany. Germany has made some devastatingly bad decisions regarding climate change and becoming more dependent on natural gas to keep the lights on and keep its manufacturing base from fleeing. Javier Blass at Bloomberg wrote that after Germany closed its remaining nuclear power plants it’s now approved plans to subsidize a huge expansion of natural gas-powered plants that last as much as ten gigawatts but The developers need to know that they can convert them into hydrogen at some point between 2035 and 2040 so they got hydrogen going for them.

The Biden administration has taken a lot of heat for pausing liquefied natural gas export approvals. They are at least concerned about oil and gas production in Guyana. Bloomberg reports that “Key Biden administration national-security officials traveled to Guyana on Sunday as the US works to prevent the country’s dispute with Venezuela over oil and mineral riches from sliding into armed conflict. Jon Finer, the principal deputy national security adviser, and Juan Gonzalez, the White House National Security Council’s senior director for the Western Hemisphere, are continuing work on regional security and economic stability, the US Embassy in Guyana said. The US Air Force’s southern commander, Major General Evan Pettus, was in Guyana last week to discuss the security cooperation as the US military strategizes how to help the nation protect its oil-heavy Essequibo region. Tension began rising again in 2015 when US giant Exxon Mobil Corp. discovered massive oil reserves off the Guyanese coast. They flared up last year after Venezuelan leader Nicolas Maduro held a referendum that purportedly showed overwhelming support for his nation’s push to take control of the Essequibo.

This comes against a backdrop of US crude supplies tightening. While this week we might get a slight build, the reality is we’re going to continue to see drawdowns in Cushing, OK. The refinery issues at the waiting Indiana plant could lead to a slight drawdown in gasoline and diesel inventories. In the big picture though, we still think that this is a good time to put on some bullish strategies as the downside near 70 should provide tremendous support.

OPEC is going continue to hold the line of production and while the US production has been amazing, there are signs it’s going to top out later this year. The US oil rig count is at a current level of 499.00, unchanged from 499.00 last week and down from 609.00 one year ago. This is a change of 0.00% from last week and -18.06% from one year ago.

Historically warm temperatures could turn into cold temperatures later in the month, but you better enjoy it while you can. HFI research says that the 10-to-15-day weather update shows much colder than normal weather with the signature blocking patterns in place.

One thing you have to keep in mind is that when we talk about the climate, it continues to change, so let’s talk about climate change California style! Weather watcher Ryan Maue has pointed out that California’s climate has changed again! From the worst megadrought in 1200 years — to nearly unprecedented atmospheric rivers and excessive rainfall warnings! Climate scientists might warn that this wet period is a new normal.

Learn more about Phil Flynn by visiting Price Futures Group.