Daily Energy Market Update 6-11-2025

Liquidity’s Daily Market Overview

Energy markets are higher today as a framework for a trade truce between China and the US. has been agreed to. Also supporting prices is the lack of progress in U.S./ Iran talks. API data released last night saw crude supplies draw less than forecast and product supplies rise more than forecast.

U.S. Commerce Secretary Lutnick said the framework puts "meat on the bones" of a stalled agreement in Geneva last month, with the aim of removing restrictions on Chinese exports of rare earths and magnets and some of the recent U.S. export restrictions "in a balanced way". But there was no additional information about the sky-high bilateral tariffs imposed. (Reuters)

The Iranian Foreign Ministry is reporting that a sixth round of indirect talks between Iran and the US will take place in the Omani capital, Muscat, on Sunday, 15 June. If nuclear negotiations fail and conflict arises with the United States, Iran will strike American bases in the region, Iran's Defense Minister said on Wednesday.  President Trump has repeatedly threatened Iran with bombing if it does not reach a new nuclear deal.  "They seek enrichment. We can't have enrichment." President Trump said Tuesday. "The U.S. proposal is not acceptable to us.", an Iranian Foreign Ministry spokesperson said. (Reuters)

API                 Forecast       Actual
Crude Oil      -1.6/-2.0        -0.37
Gasoline         +0.9           +2.969
Distillate      +0.8/+0.9    +3.712
Cushing          n/av           -0.728
Runs            -0.4/+0.2%      n/av

Last year, this week saw crude supplies increase by 3.7 MMBBL and the average increase is 2.8 MMBBL over the past five years (2020-2024). (Reuters)

US CPI prices for May came in better than forecast. May CPI was up 0.1% for the month. The forecast was for a reading of +0.3%. The Core CPI year on year rose by 2.8%. The Forecast was for a +2.9% reading. Energy prices shot up to session highs upon the release of the data, but have since eased back to the values seen before the data was issued.

Key elements in Tuesday's EIA STEO report:  U.S. crude oil production will decline from an all-time high of 13.5 MMBPD in the second quarter of 2025 (2Q25) to about 13.3 MMBPD by 4Q26 because of decreasing active drilling rigs and declining oil prices. They have reduced their 2026 US crude production estimate for 2026 by 120 MBPD to 13.37 MMBPD.. They have raised their WTI price forecasts; 2025 WTI estimate is up 52 cents to $62.33,while 2026's estimate was raised by 34 cents to $55.58. The EIA's global oil demand forecast for 2025 has been lowered by 200 MBPD to 103.5 MMBPD, while the 2026 forecast was left unchanged. The global output estimate for 2025 was raised by 300 MBPD to 104.4 MMBPD, while that for 2026 was lowered by 300 MBPD to 105.1 MMBPD. 

The World Bank on Tuesday slashed its global growth forecast for 2025 by 0.4 percentage point to 2.3%, saying that higher tariffs and heightened uncertainty posed a “significant headwind” for nearly all economies. The bank stopped short of forecasting a recession, but said global economic growth this year would be its weakest outside of a recession since 2008. By 2027, global gross domestic product growth was expected to average just 2.5%, the slowest pace of any decade since the 1960s.

Russia’s seaborne crude shipments in the week to June 8 rose by about 720 MBPD to the highest in more than three months and more than recovers from the decline the previous week, according to Bloomberg. 

One notable trade in LO/WTI options seen from the CME in Tuesday's activity was the $58.00 put was purchased 10,000 times versus buying of 1,800 contracts of the September WTI futures at $63.90.

Energy Market Technicals

Momentum remains positive for the energies, with the WTI momentum near overbought. 
 
In WTI there is a double bottom at 64.57 / 64.60 from yesterday and today. WTI is again testing the upper bollinger band on the DC chart. That band lies at 66.21. Chart support below the double bottom lies at 63.41-63.43. Resistance comes in at 66.90 and then at 67.88-67.94.

Natural Gas Market Overview

Natural Gas --NG is up 3.7 cents
NG futures are higher this morning with some heat being teased over the next 1-2 weeks. The tone of the past few sessions though has been negative due to weak LNG demand and strong production. A further 100+ storage build forecast for this week's EIA data has also been seen as a negative.

Lower 48 natural gas demand is estimated today at 69.1 BCF/d, well above the 30-day average of 66.7 BCF/d and the previous five-year average around 65.1 BCF/d for the time of year. (Bloomberg) Temperatures will gradually warm over the next 1-2 weeks, especially across the East. As a result, Gas-Weighted Degree Days (GWDDs) will steadily rise. (Celsius Energy)

The EIA's STEO kept NG price forecasts basically unchanged from last month : 2025 was lowered by 10 cents to $4.02, but the EIA points out that prices are up quite a bit from 2024's average of $2.20 due to strong export growth outpacing US gas production. Yet, the EIA raised their U.S. 2025 production estimate from last month by 1.0 BCF/d to 105.9 BCF/d. The 2026 output forecast is unchanged at 106.4 BCF/d. The agency also projected domestic gas consumption would rise from a record 90.5 BCF/d in 2024 to 91.3 BCF/d in 2025 before easing back to 91.1 BCF/d in 2026. The 2025 demand forecast was unchanged from last month, while that for 2026 was raised by 0.4 BCF/d. The agency forecast average U.S. LNG exports would reach 14.6 BCF/d in 2025 and 16.0 BCF/d in 2026, up from a record 11.9 BCF/d in 2024. The EIA raised their EOS October 2025 gas supply estimate to 3.730 TCF--up 63 BCF versus last month's estimate. By comparison, the Desk this week has an estimate for EOS of 3.866 TCF.

In the LN/NG options on the CME on Tuesday, it looks as if there was rolling of an October/January 3 month calendar spread option position. Open interest in the -$1.25 put fell, while that in the -$1.50 put rose. A trade in those 2 options was executed on the CME. The -$1.25 put was purchased against selling of twice as many of the -$1.50 puts, with the seller of the -$1.50 put collecting 0.5 cents. In the July/October 3 month calendar spread put options, the -10 cent put traded 7.9 cents and the -25 cent put traded 1 cent. These trades look to be closing of positions, based on their open interest declining.

Asian imports of LNG could be boosted as average temperatures for Japan, South Korea and China are all forecast to hold above normal through the end of August. Utilities demand for LNG is seen rising as air conditioning loads will increase. Temperatures across East Asia are already hovering above long-term averages, and are expected to continue trending higher over the next two months. Humidity levels are also seen rising amid their summer rainy season, further boosting air conditioning demand. But, high prices for LNG have kept some Asian buyers on the sidelines in recent months. Also, strong buying by Europe has seen most of the U.S. LNG exports head there in the first half of 2025. So, the boost in demand from Asia may be somewhat limited, although a dip in European buying in their slower summer season may see Asian buyers buying more U.S. LNG. (Reuters)

In NG spot futures, there is currently a double bottom from yesterday/today at 3.515 / 3.510. Support below that is seen at 3.437-3.440. Resistance is seen at yesterday's high at 3.656-3.662. Above that resistance lies at 3.747-3.750.  Momentum is negative basis the DC chart.

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Disclaimer

This article and its contents are provided for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any commodity, futures contract, option contract, or other transaction. Although any statements of fact have been obtained from and are based on sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed.

Commodity trading involves risks, and you should fully understand those risks prior to trading. Liquidity Energy LLC and its affiliates assume no liability for the use of any information contained herein. Neither the information nor any opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any opinions expressed herein are subject to change without notice, are that of the individual, and not necessarily the opinion of Liquidity Energy LLC