Strange Days Indeed, Encore Edition – In a Year of Change, Market Fundamentals Are Key to Understanding What Comes Next

It’s been quite a year already — and we’re just halfway through it! We began 2026 with energy markets looking very well supplied, with commodity prices generally expected to soften in the short term. But things quickly changed, first as a result of U.S. intervention in Venezuela, then much more dramatically with the Iran war and the closure of the Strait of Hormuz, followed in recent weeks by an uncertain cease-fire. Prices have surged at times this year for crude oil, natural gas, NGLs, refined products and petrochemicals, along with the multitude of consumer products that utilize those feedstocks. Fortunes were made (and lost) as a result. To survive such swings, you need a deep understanding of the fundamental forces impacting markets so that you can anticipate, identify and act on their secondary and tertiary effects. That’s the subject of today’s RBN blog and the focus of our upcoming School of Energy: Foundations, set for September 9-10 in Houston. Fair warning, today’s blog serves as an unabashed advertorial for the conference.

In observance of Independence Day, we are giving our analysts a break and revisiting a recent blog about the importance of market fundamentals and our upcoming conference. If you didn’t read it then, this is your opportunity to see what you missed. Happy 250th, America!

The swings in the global energy market have been significant so far in 2026, with the U.S. at the center of it all. There is no shortage of information and analysis out there, some of it seemingly contradictory. So, how do you know what data is important, which indicators to watch, and how to apply it all? Learning how to identify and analyze that information is what School of Energy is all about. To see how those pieces can come together, let’s look at some recent examples.

If you want to analyze the energy market’s volatility this year, there’s no better place to start than crude oil. By some estimates, up to 1 billion barrels of supply were shut-in due to the Middle East conflict and U.S. crude exports surged to unprecedented levels. Is the sharp rise in exports likely to be around for the long term, or is it a short-term phenomenon? It’s a complicated question, but to know the answer, you first need to know the fundamentals of U.S. crude oil supply and demand.

The supply of U.S. crude has been a growing focus of industry insiders and politicians alike as benchmark prices rose sharply in the near term as the Middle East conflict raged but remained lower in future months, a phenomenon called backwardation. To forecast how producers might respond in that scenario (or the opposite, contango), School of Energy will take students through the economics of production, how crude oil drilling impacts other commodities, and even equip you with an Excel-based production model along with instructions on how to use it. We’ll have two experts in the field at the conference: Brandon Myers, Head of Research at Novi Labs, will give us their latest evaluation of major U.S. supply basins; and Taylor Noland, Senior Crude Markets Consultant for Novi Labs, will discuss the prolific Permian Basin, from history and the major producing corridors to current-day pipeline flows and output.

The demand side of the U.S. crude balance comprises two parts: refinery runs and crude exports. Robert Auers, Managing Director of Refined Fuels at Novi Labs, will lead the discussion around the U.S. refining sector, covering everything from the basics to more detailed analysis using crack spreads and refinery yields. As shown in Figure 1 below, the 3-2-1 crack spread, a widely used benchmark for estimating oil refinery profitability, has been consistently above $50/bbl since March (see dashed green box), well above the prior three years. For crude exports, Novi Labs President of Consulting Rusty Braziel will explain the factors that drive the U.S. market, including the top destinations for U.S. crude.