Daily Energy Market Update August 25,2025

Liquidity’s Daily Market Overview

Crude oil and ULSD are higher, while RB is near unchanged. The crude oil is getting a boost from concerns that the Ukraine peace process is stalling and thus supply risks for Russian oil have risen. Also supportive is the greater expectation for  a September U.S. interest rate cut. Distillates are getting some support from continued Ukrainian attacks on Russian energy infrastructure.

Fading optimism over a Russia-Ukraine summit and President Trump's tariff threats against India continue to provide underlying support to prices. "It's looking increasingly likely that secondary tariffs against India for their purchases of Russian oil will go ahead on Aug. 27," the analysts say. (WSJ)  President Trump on Friday once again threatened to impose tougher sanctions on Russia unless there’s a deal to end the war. Trump said there needs to be more clarity within roughly two weeks. However, the market may be reluctant to read too much into this latest threat, given the lack of action taken by the US administration against Russia following the Trump-Putin summit. (ING)

"The market is pricing in more than an 85% probability that the Fed cuts interest rates by 25 basis points in September, up from around 72% ahead of Powell's speech (this past Friday)," analysts at ING say.

Ukraine launched drone attacks on Russia over the weekend, sparking fires at the major Novatek's Ust-Luga fuel export terminal. The Ust-Luga complex, which opened in 2013, processes gas condensate into light and heavy naphtha, jet fuel, fuel oil and gasoil. A fire at Russia's Novoshakhtinsk refinery, caused by a Ukrainian drone attack, was burning for the fourth day on Sunday, the region's acting governor said. (Reuters)

The Baker Hughes oil rig count showed a decrease of 1 unit in Friday's report.

CFTC data showed money managers reduced net length in WTI, but increased it in ULSD & RB in the week ended Tuesday August 19. WTI net length on ICE/CME combined fell by 7,331 contracts due mostly to shorts having been added on the CME. The WTI net crude length held by money managers is the lowest since October 2008, as per ING analysis. Brent net length was reduced by 23,852 contracts as mostly longs were shed.  RB net length rose by 9,576 contracts as mostly shorts were covered. ULSD net length rose by 4,643 contracts as longs were added.

Energy Market Technicals

Technicals
Momentum remains positive and not overbought for the energies.

WTI spot futures have tested resistance at 64.10-64.15 with the high of 64.20. Next resistance lies at 65.09-65.11. Support lies at 63.02-63.06 and then at 62.5-62.52. The spot DC chart shows a stepladder up pattern for the last 5 sessions.

Natural Gas Market Overview

Natural Gas--October NG is down 4.7 cents
NG is lower as below average temperatures are forecast for the next 7-10 days. Celsius Energy commentary says that the end of summer forecast is one of the coolest of the Millennium.

Atlanta will see temperatures from August 26 to September 3 that are forecast to be 5 to 12 degrees below normal. Dallas will see temperatures that are anywhere from 8 to 14 degrees below normal during the coming 10 days. Chicago will see highs that average 3 to 14 degrees below normal. (Weather Channel)

Asian spot LNG prices fell slightly during the past week amid high storage inventories, continued weak demand and lack of progress on Ukraine peace talks, Reuters said. "We expect further downside to Asian LNG prices, as storage levels remain elevated, while the supply picture continues to firm," said a gas analyst at Kpler. Although Japan's summer heat continues, demand for November heating is lagging. Meanwhile, China is leaning more heavily on domestic gas and pipeline imports, reducing reliance on spot LNG and South Korea is well-stocked, exerting further downside pressure. Kpler's analyst adds that "spot prices may need to test below the $10/mmBtu threshold to revive meaningful buying interest." But, according to Bloomberg, North Asian LNG buyers China, Japan and South Korea are raising imports to restock inventories depleted over a hot summer after muted deliveries in recent months.

CME data for NG futures from Friday's trading shows open interest rose by 15,417 contracts, even as September open interest fell by 7,415 contracts. We believe that mostly new shorts were added in October and December through March.

The Baker Hughes gas rig count issued Friday was unchanged.

CFTC data shows money managers reduced their net short positioning in futures/options on the CME by 13,967 contracts in the week ended Tuesday August 19. This was achieved mostly through shorts being covered. The net short position fell to 36,785 contracts.

Technically the NG spot futures contracts has fallen 5 weeks in a row and has settled lower in 8 of the past 9 weeks. During the past 5 weeks the spot futures have fallen by 24.32%. Thus, the steep drop has seen the momentum fall for the NG basis the weekly chart to an oversold condition.

The October NG sees support at 2.699-2.705 and then at 2.651-2.660 via DC chart values. Resistance lies at 2.866-2.869. There is a gap on the October daily chart currently to the Friday low at 2.787. Momentum basis the October daily chart is getting near oversold.

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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