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- Daily Energy Market Update 6-26-2025
WTI is up 29 cents August RB is up 1.33 cents August ULSD is up 2.55 cents
Liquidity’s Daily Market Overview
Energy prices are higher today, led by the ULSD, as Wednesday's DOE data showed large inventory draws amid strong product demand. News wires also talk of the market keeping a wary eye on the Iranian/Israeli ceasefire. A weaker U.S. dollar is also supportive for the energies. The Bloomberg’s Dollar Spot Index slumped 0.6% to the weakest level in over three years.
The DOE stats showed stronger draws than forecast. Product demand rose. Gasoline demand rose by 389 MBPD to a very strong total of 9.688 MMBPD, which bested the prior 2 years demand by 380 to 700 MBPD. Gasoline supplies fell by 2.075 MMBBL; forecasts were for a small build. The same is true for the distillate. Supplies fell by 4.066 MMBBL, while a small build was expected. The distillate draw was the largest since late January. The heating oil portion of the distillate draw was the largest seen since November. Distillate demand rose by 48 MBPD to 3.794 MMBPD. This beat the prior 2 years demand by 250 to nearly 500 MBPD. Crude oil inventories fell for the fifth straight week, leaving stocks 11% below the five-year average for this time of year. But, the draw is a bit hard to justify, given that net crude imports rose by 531 MBPD, outpacing the demand increase seen in crude inputs to refineries of 125 MBPD.
The dollar fell and US Treasuries rallied after a report that President Donald Trump is considering naming Federal Reserve Chair Jerome Powell’s successor well before the incumbent’s term is scheduled to end next May. Traders have been adding to bets on more US interest-rate cuts in the past days, as Fed officials including Waller and Michelle Bowman, two Trump nominees, appeared to support a move as early as July. Two-year yields — the most sensitive to changes in monetary policy — fell almost 20 basis points over the past week to trade at 3.75% on Thursday, a seven-week low. (Bloomberg)
Russian is open to another output hike at the next OPEC+ meeting if the group deems it necessary, a Bloomberg source said. OPEC+ has a meeting set for July 6.
Energy Market Technicals
Currently, technically the HO & WTI are having inside trading days versus yesterday's price range. Momentum remains negative for the energies.
WTI spot futures see support at 64.00 and then at 62.45-62.50. Resistance lies at 66.90 and then at 67.60-67.63.
RB August support lies at 2.0626-2.0630, which was tested with the overnight low of 2.0595. Below that support is seen at 2.0465-2.0486. Resistance comes in at 2.1083-2.1098 and then at 2.1452-2.1459.
August ULSD support lies at 2.2482-2.2501 and then at 2.2006-2.2014. Resistance is seen at 2,3124-2.2139 and then at 2.3520-2.3523.
Natural Gas Market Overview
Natural Gas--August NG is down 2.8 cents
NG prices are lower again today with today's expiring July contract at a near 1 month low for the spot futures. Cooler weather, high gas production and a slow return from maintenance of LNG feed gas volumes are weighing. Also weighing on NG prices is the expectation for another above average storage injection in today's EIA data
As the NGI headline said Tuesday: "Storage Concerns Looking ‘Significantly Less Likely’. This was reflected in the October/January NG spread that fell to its widest value. The futures spread settled $-1.273 on Wednesday. The October January 3 month -75 cent call calendar spread option was purchased for 2 cents in a trade seen as an an initiating position, given open interest in the option rose in CME data.
The WSJ & Reuters surveys for the EIA gas storage data to be released today are calling for a build of 88 to 89 BCF. This compares to last year's build of 59 BCF and the 5 year average build of 79 BCF.
This week, LSEG reported average gas output in the Lower 48 states rose to 105.5 BCF/d in June, up from 105.2 BCF/d in May. Meanwhile, gas flows to the eight major U.S. LNG export plants fell to 14.1 BCF/d in June from 15.0 BCF/d in May, largely due to seasonal maintenance. (Trading Economics)
The European TTF spot futures have fallen to their lowest value seen since June 2nd. The easing of tension in the Mideast has been the main driver for the retreat in European gas prices this week, with speculative positioning prior to this week having risen to a very high level. The retreat in prices comes even as very high temperatures are set to invade some portions of Europe in the coming days.
The U.S. front month arb to Northeast-Asia (via the Cape of Good Hope) has opened up for the first time in over 2 months, currently assessed at $0.061 and marginally incentivising prompt U.S. cargoes to deliver to Asia, according to Spark Commodities. Atlantic LNG arbs for the U.S. via the Cape, U.S. via Panama and Nigeria are all pointing to Asia and at their highest levels in over 9 months, since September 2024. (Market News)
There were large open interest increases in the $4.50 and $5.00 calls for August seen from CME data from Thursday's activity. The 2 calls were a part of the August $4.00/$4.50/$5.00 call butterfly that traded at a cost of 4.5 cents to the buyer of the wings. Additionally, the $4.50 August call was sold against a purchase of the $3.25 put for a cost to the put buyer of 3.6 cents, with delta futures in August bought at $3.63. Also, noticeably the October $2.25 put open interest rose by 4,785 contracts in Wednesday's CME data. The put was sold 2 times against the purchase of the $2.50 October put. The buyer of the $2.50 put collected 0.3 cents for selling twice the amount of the $2.25 puts.
Technically NG has negative momentum that is not yet oversold. August futures support at 3.518-3.524 was tested overnight with a low of 3.522. Below that support is seen at 3.443-3.445. Resistance comes in at 3.642-3.649. Above that resistance lies at 3.709-3.715.
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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
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