- Daily Energy Market Update
- Posts
- Daily Energy Market Update August 3, 2026
Energy markets opened the week under heavy selling pressure as signs of diplomatic progress between the U.S. and Iran reduced fears of a prolonged supply disruption in the Middle East.
President Donald Trump said he had called off planned military strikes against Iran and indicated that new negotiations would begin Monday. Iran, however, denied direct talks with the U.S., stating that discussions with Oman are focused on a temporary shipping arrangement through the Strait of Hormuz rather than a full reopening of the waterway.
The prospect of easing geopolitical tensions weighed heavily on crude oil prices, with traders unwinding much of the risk premium built into the market in recent weeks. Although shipping activity through the Strait of Hormuz remains well below normal levels, the potential for improving traffic was enough to pressure prices lower.
OPEC+ also agreed to a modest production increase from September, continuing its gradual return of supply to the market. However, the announcement had little immediate impact on prices, as the overnight selloff was driven primarily by easing geopolitical tensions and optimism surrounding the Strait of Hormuz. With shipping disruptions still limiting exports, the increase is unlikely to have a meaningful impact on near-term physical supply.
Despite the sharp decline in prices, uncertainty remains elevated. There is still no agreement guaranteeing unrestricted transit through the Strait of Hormuz, and shipping volumes remain well below normal. Any setback in negotiations or renewed disruption to maritime traffic could quickly see geopolitical risk premiums return to the market.
The market's focus now shifts to developments in U.S.-Iran diplomacy, progress on restoring shipping through the Strait of Hormuz, and Friday's U.S. Nonfarm Payrolls report, which could influence expectations for Federal Reserve policy and overall market sentiment.
Crude (Cont. Contract)
Crude gapped lower again to start the week and continued to trade lower, reaching an intraday low of 78.78. It has since bounced off the low but is still down 4.86 at 79.83 (7:37am). The decline pushed prices below the 20-day moving average, which had acted as support last week, and also broke through the 50-day moving average, adding to the bearish technical outlook.
Momentum has started to move out of overbought territory but remains elevated, leaving room for further downside before reaching neutral conditions.
Key Levels
Resistance
80.84 – 20-day moving average
81.84 – 50-day moving average
87.68 – Gap from last week
Support
77.78 – Last week's low
76.17 – 200-day moving average
69.48 – Lower Bollinger Band
Crude (Cont. Contract)
Heating Oil (HOU6)
Heating oil also gapped lower during the Asian session, but after making an overnight low of 3.9622, it recovered some of its losses and is trading around 4.0126 to start the morning. Despite the overnight sell-off, prices held above last week's low and the 20-day moving average, which is currently at 3.9002. While the longer-term uptrend has not yet been broken, the recent price action suggests bullish momentum is beginning to fade.
Momentum remains firmly in overbought territory but has crossed lower and is now pointing down, suggesting bullish momentum is beginning to weaken. This increases the likelihood of a deeper correction following the strong rally that began at the end of June. A close below the 20-day moving average would provide stronger confirmation that the uptrend is losing control.
Key Levels
Resistance
4.2557 – High from last week
4.2888 – Highest level since the June low
4.4990 – Upper Bollinger Band
Support
3.9000 – 20-day moving average
3.6339 – 50% Fibonacci retracement (June low to July high)
3.5536 – 50-day moving average
Heating Oil (HOU6)
Crude Spread (CLZ6/CLZ7)
The spread also gapped lower overnight and is trading down 1.76 at 5.70 as of 7:53 a.m. The overnight low formed a potential double bottom with the low from July 28. Although prices traded below both the 20-day and 100-day moving averages, it will be important to see whether the spread closes below these key technical levels, as that would provide stronger confirmation of a shift in trend.
Momentum remains in overbought territory but has crossed lower and is pointing down, suggesting bullish momentum continues to weaken and the spread may be vulnerable to further downside.
Key Levels
Resistance
6.02 – 100-day moving average
6.17 – 20-day moving average
8.14 – Last week's high
Support
5.58 – 50-day moving average
4.51 – 61.8% Fibonacci retracement (July low to July high)
2.94 – 200-day moving average
Crude Spread (CLZ6/CLZ7)
Natural Gas Market Overview
Natural Gas (NGU26)
Natural gas is trading higher to start the week. After opening unchanged during the Asian session, it is now up 0.021 at 2.768 as of 8:12 a.m. Over the past four sessions, natural gas has consolidated after breaking lower early last week. Overnight, prices made a modestly lower low compared with Friday's session but have otherwise traded largely within Friday's range.
Momentum remains deeply oversold but is still crossed lower and pointing down, suggesting the recent consolidation has not yet produced a meaningful shift in momentum.
Key Levels
Resistance
2.799 – Bottom of the previous trading channel (now resistance)
2.867 – 20-day moving average
3.050 – 50-day moving average
Support
2.666 – Wednesday's bullish reversal low
2.634 – Lower Bollinger Band
Natural Gas (NGU26)
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:
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
Reply