Daily Energy Market Update August 22,2025

Liquidity’s Daily Market Overview

Energy prices are mixed with crude oil slightly higher, but products lower. The tone of news wire commentaries is one of oil being supported by waning optimism over a resolution of the Ukraine conflict. As ING comments: "  The less likely a ceasefire looks, the more likely the risk of tougher sanctions."

Product prices yesterday firmed versus crude oil on the back of recent refinery incidents. In particular on Thursday, news was seen that BP's Whiting, Indiana 440 MBPD refinery has been forced to shut some units due to recent flooding. (Bloomberg) Cracks in Europe are being supported by fresh attacks by Ukraine on Russian refining installations.

Russia expects India to continue buying its oil, a senior Indian official said, even as the South Asian nation faces higher US tariffs and harsh criticism from Trump administration officials for the trade. India’s imports of Russian crude are likely to stay at current levels, as per a Russian trade representative. India’s imports from Russia amounted to about 1.7 MMBPD, or nearly 37% of the nation’s overseas purchases, in mid-2025. After a brief pause earlier this month, India’s state-run refiners have returned to buying Russian oil, Bloomberg News reported Wednesday. Russia sees its oil price discount as being large enough to keep India as a customer. But, President Trump’s trade advisor, Peter Navarro, said he expects that secondary tariffs on India for its purchases of Russian oil will go ahead next week. (ING)

The Trump administration on Thursday issued more Iran-related sanctions, targeting 13 entities based in Hong Kong, China, the United Arab Emirates and the Marshall Islands, as well as eight vessels, the U.S. Treasury Department said. The State Department separately said it imposed sanctions on two China-based operators of oil-related terminals and storage. It said they handled imports of Iranian oil aboard tankers previously targeted by U.S. sanctions. Iran's top diplomat said on Wednesday that the moment for "effective" nuclear talks with the United States has not yet arrived, adding that Iran would not completely cut off cooperation with the United Nations nuclear watchdog.  (Reuters)

Oil products inventories at the UAE's Port of Fujairah dropped 11% in the week ended Aug. 18, with heavy distillates slumping to the lowest in almost seven years, according to Fujairah Oil Industry Zone data published Aug. 20. Inventories of middle distillates such as jet fuel and diesel tumbled 32% to 1.532 MMBBL, a two-month low. They are down 22% since the end of 2024. In Europe, the latest ARA Gasoil inventory data showed them rising by 9.13% on the week ended Thursday to their highest level since mid-June. But, they remained 13.8% below year ago level.

The Trump Administration is expected to rule on a backlog of 195 small refinery exemption requests filed under a US biofuel law dating back to 2016 as early as Friday, but will delay a decision on whether larger refiners should compensate for some exempt gallons, according to Reuters. The rulings should include some partial denials but will not be a sweeping win for small refiners, according to the Reuters source. The policy will likely impact the energy and agricultural sectors with influence over prices for RINs and agricultural commodities, including ethanol. In the past, widespread exemptions without reallocation have sent renewable blending (RINs) credit prices lower

Weak economic data from Germany on Friday shoed Europe's largest economy shrinking by 0.3%  in the second quarter, raising concerns over oil demand. Demand from top trading partner the United States slowed following months of buying ahead in anticipation of U.S. tariffs. "It looks increasingly unlikely that any substantial recovery will materialize before 2026," one economist said. (Reuters)

Markets are awaiting Fed chairman Powell's speech today at Jackson Hole for signals on a possible Fed interest rate cut next month. The dollar is a bit higher today in anticipation of Powell's speech. The dollar has risen on the back of yesterday's release of US S&P PMI data for August. Confidence rose both in the manufacturing and service sectors, pushing the composite PMI data to the highest levels since last December. (ING)

Energy Market Technicals

Technically the energies have positive momentum.

WTI spot futures still have a sideways price pattern to the past 10 days on the DC chart. Resistance is seen at 64.10-64.15 and then at 65.09-65.11. Support lies at 62.50-62.52 and then at 61.94.

Natural Gas Market Overview

Natural Gas--NG is down 6.9 cents
NG futures are lower today, though they are having an inside trading day versus yesterday's price range. Weather demand will ease in the coming days to below normal, thus weighing on prices. Thursday's rally in NG prices was due to a better than expected EIA storage number and due to the recent bounce back in feed gas volumes at LNG export plants.

The EIA storage data seen Thursday showed a 13 BCF build. This was 9 to 12 BCF below news wire estimates and was the smallest injection for the period seen over the past 5 years.  Total storage rose to 3.199 TCF. This is +174 BCF/+5.75% versus the 5 year average, but -95 BCF/-2.88% versus last year's level. . We note that the EIA data showed a 13 BCF draw in the South Central region, which is home to the Gulf Coast LNG plants and to the Permian shale basin. We wonder if the rig count drop seen in recent weeks in the Permian basin is not seeing oil/gas production dropping and thus filtering through to these gas storage numbers.

Forecaster Atmospheric G2 said Thursday that forecasts shifted cooler across most of the US for August 31-September 4. (Barchart)

U.S. domestic natural gas production is estimated at 108.4 BCF/d today Friday, down from the average of 109.4 BCF/d so far in August, according to Bloomberg data. Celsius Energy noted  natural gas production dropped from nearly 110 BCF/d in late July to 106.7 BCF/d on Thursday. Yet, that is still up by 4.8 BCF/d compared to 2024, Celsius Energy commentary adds.

European natural-gas prices have risen this week as expectations of a Russia-Ukraine cease-fire wane and supply squeezes loom. The TTF futures are on track for a 4.1% weekly gain, entirely recovering from last week’s losses. Attention is now increasingly turning to maintenance work in Norway, which will lower Norwegian gas flows to Europe, ING analysts say in a note. European Union gas storage is close to 75% full at the moment, lagging the five-year average of 82% and well below last year’s 91%, analysts add. (WSJ) ING commentary adds : "  European prices will need to remain competitive relative to Asia to ensure enough LNG heads to Europe ahead of the next heating season. However, LNG send-outs in Europe have been trending lower since peaking in June."

In the LN NG options on the CME Thursday, 3,000 of the October January three month -$1.00 calls were sold against which 3,000 of the -$1.50 puts were purchased for a cost of 0.3 cents. Most of the -$1.00 call portion of the trade was liquidation, while the -$1.50 put portion was initiating based on CME open interest data. The October January futures spread settled at -$1.24, thus nearly in the middle between the 2 strikes, thus underscoring the near flat price that traded in the option strategy.

Technically, momentum basis the DC NG chart remains negative. Reuters commentary says that Thursday's NG price increase pushed the contract out of technically oversold territory. Open interest data from the CME suggests that part of Thursday's rally was due to short covering, as the soon to expire spot futures September contract saw open interest decline by 17,500 contracts. Support for the spot futures lies at this week's double bottom at 2.725 and then at 2.688 from lows seen last October/November.  Resistance at 2.851-2.858 was almost tested yesterday with a high of 2.849. Next resistance we see lies at 2.912-2.922.

Enjoyed this article?

Subscribe to never miss an issue. Liquidity’s Daily Energy Market Updates provide a comprehensive analysis of both the fundamentals and technical factors driving energy markets.

Click below to view our other newsletters on our website:

Ethanol Update 

Natural Gas Update

Fuel and Freight Daily Report

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