Daily Energy Market Update August 1,2025

Liquidity’s Daily Market Overview

Energy prices are lower.  WSJ commentary says that today's pullback in energy prices is due to tariff concerns as today is the deadline for those that did not make deals with the U.S.  WSJ also cites "oversupply concerns" as OPEC+ is due to announce a production increase for September at their meeting this weekend. This coming on the heels of the large crude supply increase seen in the DOE data this week. News wire commentary though touts the fact that prices are up on the week on possibilities for further sanctions by the U.S. against Russia and better economic data seen this week. As would be expected with the concern over industrial demand due to tariffs, ULSD is leading the pullback in prices today.

The U.S set tariff rates as today's deadline arrived. Trump's new tariff rates include a 35% duty on many goods from Canada, 50% for Brazil, 25% for India, 20% for Taiwan and 39% for Switzerland, as per Reuters reporting. Nearly 70 countries face Trump’s import duties that were due to come into force on August 1; most were delayed at the last minute and will begin on August 7. (Al Jazeera) Global shares stumbled, with the European Stoxx 600 index down around 1% in the first hour of trading, and 1.7% lower on the week and set for its biggest weekly drop since early April. (Reuters) U.S. equity futures are down about 1%.

JP Morgan analysts said on Thursday that Trump's threatened penalties on China and India over their purchases of Russian oil potentially put 2.75 MMBPD of Russian seaborne oil exports at risk. Some analysts, however, remain concerned that U.S. levies will limit economic growth by raising prices, which could weigh on oil demand. President Trump has threatened to impose 100% secondary tariffs on Russian crude buyers. (Reuters)

U..S refiners who process heavy crude expect the market for that grade to become more favorable following a prior period of supply tightness and higher prices in the first half of 2025, Bloomberg said. PBF Energy expects 2.0-2.5 MMBPD of medium and heavy crude to return in Q3 as seasonal refinery maintenance ramps up. This should widen light-heavy spreads in Q3 and Q4, PBF said, adding that narrower spreads were a significant challenge in Q2. HF Sinclair said that there should be some relief to refiners regarding heavy crude prices in Q4, but not at the level seen in years before the Trans Mountain pipeline expansion. HF Sinclair expects light-heavy spreads to widen some time in 2026, with the differential to be around $9-$10/bbl in Q3 and then strengthening out further in Q4 to around $13/bbl. (Market News) The heavy crude tightening in recent months was slightly difficult for U.S. Gulf Coast refiners, as they prefer that grade. The tightening came as supply into the U.S. was restricted from Venezuela, Mexico and Canada.

Exxon and Chevron posted better than expected 2nd quarter profits. Exxon's profits rose as higher oil and gas output and low production costs offset the impact of lower crude prices. Oil and gas production was the highest for any second quarter since the merger of Exxon and Mobil formed the company more than 25 years ago, Exxon Mobil said. Chevron had a similar profit  profile as Exxon. Chevron beat analyst estimates for second-quarter profit on Friday as record oil and gas production and lower capital expenditure helped the U.S. oil producer boost earnings despite weaker crude prices. "We had strong execution, record production and exceptional cash generation," said Chevron's Chief Financial Officer.

Today's Non Farm Payroll data for July is forecast to show a total of 105,000 to 115,00 new jobs having been added. This comes after June's better than expected total of 147,000 new jobs having been added. 

Energy Market Technicals

Technically the products do not look so good basis their DC charts as the spot futures move to September. ULSD momentum is negative with the turn to September. RB and WTI momentum remain positive, although that for RB looks to be cresting.

RB has a rollover gap on its DC chart from August's expiration. The gap goes to the August expiration low of 2.2113, which is where we saw the double top created in the September futures at 2.2107/2.2112. There is resistance at 2.1774-2.1776, which is today's high. Above that resistance is seen at 2.1922-2.1926. Support comes in at 2.1355-2.1367 and then at 2.1168-2.1181.

Natural Gas Market Overview

Natural Gas-NG is down 3.3 cents
NG spot futures are down slightly today after yesterday's rally, which was supported by stronger LNG feedgas volume and a hotter forecast. The rally came despite a disappointing EIA storage number. 

The EIA storage data disappointed with a build of 48 BCF. That was 11-12 BCF more than forecasted by surveys from WSJ and Reuters. Total storage rose to 3.123 TCF. That is +195 BCF/ +6.66% versus the 5 year average. Storage though is still 123 BCF/3.79% below last year's level. Record natural gas production and sttong wind generation during the reporting period are the reasons for the larger than expected storage injection.

Today's feedgas volume is estimated to have risen a bit further from Thursday to 15.17 BCF/d. NG spot futures got a boost Thursday from news that Freeport had ramped up volume as power was restored to the facility. Freeport LNG recovered from another power outage, with Bloomberg reporting that all three trains are now receiving feedgas, though Reuters reports that Train 1 is still offline. Nominations to Freeport recovered Thursday to 1.06 BCF/d, up from 0.06 BCF/d Wednesday. Today's feedgas volume to Freeport is said to be 1.93 BCF/d. Thursday's LNG net flows from the US totaled 14.87 BCF/d, up from the Wednesday's total of 13.33 BCF/d. Exports from Sabine Pass were also up about 0.5 BCF/d.

Forecaster Atmospheric G2 said Thursday that forecasts shifted warmer for the western half of the U.S. for August 5-9, with above-average temperatures seen expanding across the Southwest and Texas. Atmospheric G2 projects peak cooling-degree-day demand will climb 15% above normal. San Antonio is set to see highs of 100 degrees from Aug. 3 thru Aug.9. That is 4 degrees above normal. Dallas will see highs between 100 and 101 degrees from Aug. 6 thru Aug.9, which is 3-4 degrees above normal.

Bloomberg data estimated that lower 48 dry gas production stood at 107.78 BCF/d on Thursday, down from the previous day of 109.03 BCF/d.

Global LNG markets have returned to more “normal” trading similar to the period before early 2022, when Russia invaded Ukraine and caused natural gas prices to hit astronomical levels, Shell plc’s top executives said Thursday. They thus see less profit possibilities from arbitrage opportunities.  After seeing muted demand for liquefied natural gas from Asia in the first half of the year, which allowed Europe to restock, Shell's Chief Financial Officer said LNG markets could tighten again after the summer. (Reuters/NGI)

NG momentum basis the DC chart is positive as the spot futures currently are well above the prior 4 sessions' lows. Market commentary suggested that bulls " simply sought to defend $3", hence the rally seen Thursday. The prior sessions' lows provide the support points we see at 3.011-3.014 and then 2.972. Resistance lies at 3.140-3.145 and then at 3.186-3.187.

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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.

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