Daily Energy Market Update August 19,2025

Liquidity’s Daily Market Overview

Crude oil  prices are lower as the market weighs the possibility of trilateral discussions between Presidents Trump/Putin & Zelensky, which could lead to the lifting of sanctions on Russian crude, raising supply.  There is some doubt as to whether the trilateral meeting will yield any breakthrough hence the sideways action for now in the energies as per some news wire accounts.

This morning President Trump has tweeted that Putin may not want a deal. Trump added that Ukraine would not become a part of NATO. Trump added that the death toll in the conflict shows a need for "fast talks".

Monday's uptick in energy prices was seen as a reflection of doubts over a possible Ukraine conflict resolution. The speculation on Monday was that there will be no resolution to the Russian-Ukrainian war anytime soon, which could lead to secondary sanctions on Russian crude exports that tighten the global oil supply.  (Barchart) ING commentary reads as follows: "Betting markets aren’t overly convinced that we’ll see a ceasefire before the end of the year. Polymarkets is showing a 38% chance of a ceasefire, well below the peak of 78% seen in March. The modest price action in the oil market this morning appears to fit with this view."

 NATO Secretary-General Rutte said Russian President Putin has agreed to meet with Ukrainian President Zelensky. (WSJ) This morning, the US Treasury secretary said that there is a 'strong belief' that a Putin/Zelensky meeting will happen. He added that tariffs on India would be raised due to their buying of Russian oil. (Bloomberg)

A Reuters analyst writes " President Trump’s high-stakes diplomacy to resolve the war in Ukraine is unlikely to jolt oil and gas markets, no matter the outcome." He details how russian oil and gas flows to Europe have fallen dramatically as western sanctions and restrictions have been imposed. Russian gas now accounts for just 18% of European imports, down from 45% in 2021, while the bloc’s oil imports from Russia have fallen to 3% from around 30% over that time.  Before 2022, Europe accounted for nearly half of Russia’s 4.7 million barrels per day of oil exports and 75% of its gas exports, according to the U.S. EIA. The European Union plans to fully phase out Russian energy by 2027. Meanwhile, India has increased its share of Russian crude to 38% of total imports from 16% in 2021, according to Kpler. China and Turkey have also notably ramped up their Russian oil purchases. Even though Indian buyers already appear to be reducing their Russian oil purchases, the impact on global supplies has been minimal as China has increased its intake of Russian crude. Ultimately, China matters far more in this story, and it’s unlikely to significantly curb its Russian oil imports, not least because it considers its relationship with Moscow to be strategic. The Reuters analyst adds :" don’t bet on a full normalization of relations between Russia and the West any time soon." It would take a full lifting of U.S. and European sanctions to cause energy markets to react much," he adds. 

Energy Market Technicals

For now the energies are having inside trading days versus yesterday's price ranges. Momentum for the products basis the October daily charts is positive, while that for WTI is neutral at near oversold level.

October WTI support is seen at 61.29 and then at 60.08-60.14. Resistance lies at 63.48-63.54.

Natural Gas Market Overview

Natural Gas- NG is down 6.3 cents
NG futures are trading lower as cooler weather is forecast for the end of the month and LNG volumes have weakened in the past few days.

Forecaster Atmospheric G2 said Monday that forecasts shifted cooler across the eastern two-thirds of the US and Southwest for August 23-27. (Barchart) This forecast comes even as the National Weather Service issued heat warnings on Monday for parts of the South into Texas and Oklahoma. The Electric Reliability Council of Texas issued no such advisory, but it forecast load to peak at 85.3 GW on Aug. 18, its highest peak so far in 2025. (Platts)

Notable in the LN/NG options activity from Monday is the large open interest increase in the October put options. The strikes that saw markedly higher open interest were the $2.50 and $2.25. The $2.50 strike was used in various trades. Most notable was the put butterfly trade in which the $2.75 and $2.25 puts were bought versus selling of twice as many $2.50 puts for a cost of 3.5 cents to the buyer of the wings. The $2.50 put was bought for 6.2 and 6.1 cents against delta purchases of the October futures at $2.98 and $2.99, respectively.

Oil Price.com has an article detailing the large increase in LNG exports seen in the past year and the further increase expected as more projects come online. But the article points out the difficulties that may arise at getting the needed gas volume to these facilities as pipeline capacity is lacking. The shortage of pipelines could slow down the U.S. LNG rush and it might slow down the price inflation, which the EIA sees forthcoming. Rising natural gas prices reflect relatively flat natural gas production amid an increase in U.S. liquefied natural gas exports,” the EIA said. One reason why gas production may remain flat is precisely the absence of additional pipeline capacity to take the gas to where it is needed.

Asian spot LNG prices declined last week on soft demand and strong storage inventories. The Asian price was also possibly helped by the drop in the European LNG price, thus reducing some of the competition for spot cargoes. The average LNG price for September delivery into north-east Asia fell by 25 cents on the week to $11.65/MMbtu.  S&P Global Commodity Insights assessed its daily NW Europe LNG price for cargoes delivered in September on an ex-ship (DES) basis at $10.582/mmBtu on August 14. While the weather has turned a slightly hotter again in Asia it has not attracted major spot purchases – partly due to the pressure on oil prices – which meant oil-indexed long term LNG contracts became competitive against spot purchases, one analyst quoted by Reuters said. An Argus Media analyst said that "some Chinese demand has emerged, with Beijing Gas buying two cargoes below $12/mmBtu. The firm last year said that it viewed $12/mmBtu and above as too expensive for LNG imports." Kpler commentary said that "prices are seen lower next week as high Chinese inventories continue to keep north-east Asian spot demand soft, with stable Pacific supply and seasonal temperatures adding to the bearish tone."

Early estimates for this week's EIA storage data are calling for a build of 18 to 26 BCF. This compares to last year's build of 29 BCF and the 5 year average build of 35 BCF.

In our view, there are two supportive elements ultimately underlying NG futures. One is the drop in WTI prices seen of late, which raises the possibility for U.S. crude production and hence gas production to drop. Also what could be supportive is the fact that the speculative NG short position is the largest seen since November, thus raising the risk of short covering at some point --as was seen Friday.

Technically, NG is also having an inside trading day today versus yesterday's price range. Momentum remains positive on the DC chart, even as price action of the past week has a sideways pattern. Support for NG spot futures is seen at last week's lows at 2.764-2.774 and then at 2.688, which are lows from October/November of 2024. Resistance comes in at the double top from yesterday/today at 2.912-2.922 and then at 2.983-2.985.

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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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