Daily Energy Market Update March 20,2026

Liquidity’s Daily Market Overview

Crude oil prices are lower as the news of the US not implementing a crude oil export ban and the potential de-escalation around energy infrastructure targeting are weighing on prices, even as Iran remains defiant.  Another factor dragging down crude was US Treasury Secretary Bessent saying the U.S. might "unsanction" Iranian oil that is already at sea. That would be the equivalent of about 140 MMBBL, Bessent told Fox Business.

Two waves of Iranian drones attacked a Kuwaiti oil refinery early Friday, sparking a fire. The Mina Al-Ahmadi refinery, which can process some 730 MBPD is one of the largest in the Middle East. It was damaged Thursday in another Iranian attack. (Bloomberg)  A senior Iranian security source told CNN Thursday that the strait “will not return to pre-war conditions,” reiterating earlier threats that the waterway would be disrupted if Iran came under attack.

But, on Thursday, Israeli Prime Minister Netanyahu said Israel would refrain from more attacks on Iranian energy facilities. He also said that Israel is helping the US open the Strait of Hormuz. (Bloomberg)

Treasury Secretary Bessent added re the "unsanctioning" of Iranian oil, that Iran’s supplies have mainly been heading to China up to now, but once sanctions are eased, that can then go elsewhere, Bessent said. “It can flow into Malaysia, Singapore, Indonesia, Japan, India — who have been good actors in this.”  Bessent also said that the US could unilaterally do another SPR release to keep the price down. Bloomberg commentary though says drawing even more oil down could be logistically and physically tricky. The reserve is already poised to fall to its lowest level since 1982 if the administration completes its 172 MMBBL release. By law, non-emergency drawdowns are barred once inventories in the reserve fall below 252.4 MMBBL. (Bloomberg)

Thursday saw very volatile trading in the WTI Brent arbs. The arbs had fallen to fresh lows overnight, but rose dramatically ( favor of the WTI) after a headline from Bloomberg was seen that said that the US was not going to implement a crude oil export ban.  Speculation of US protectionist policies and possible tax changes designed to keep more US crude at home had exacerbated WTI’s discount, traders said. (Bloomberg)

Also possibly weighing on oil prices is the news seen Thursday that In a joint statement, after earlier hesitating, Britain, France, Germany, Italy, the Netherlands and Japan expressed "our readiness to ​contribute to appropriate efforts to ensure safe passage through the Strait".  (time.com)

The head of the IEA said today that it could take 6 months to restore oil and gas flows from the Persian Gulf. (Reuters)

North Dakota crude output is expected to rise in March ​and the following months as operators in the third-largest oil-producing ‌state restart inactive wells and winter restrictions are eased, the state's regulator said on Thursday. The North Dakota Department of Mineral Resources said, however, that the pace of ​activity would depend on how long oil prices stay high ​and that oil majors' budgets have already been set. (Reuters)

Today is the last trading day for the April WTI futures. WTI open interest on the CME fell by over 52,000 contracts Thursday--with the April contract's open interest falling by over 45,000 contracts ahead of today's expiration.  

The average prices for gasoline and diesel at the pump in the US have risen further today. Gasoline costs $3.912, as per AAA data. That is up 2.8 cents from yesterday and up 93.0 cents from February 27. Today's gasoline price is the highest average price for a gallon of regular gas since October 13, 2022. (CNN) The diesel price at the pump has risen today to $5.159; that is up 6.0 cents from yesterday and up $1.505 from February 27. The diesel price at the pump is the highest seen in 4 years. The rise in the price of diesel fuel used for trucks and machinery is particularly concerning, given that roughly 70% of goods are transported through trucking in the US, as per Yahoo Finance commentary. 

Goldman Sachs has suggested that higher oil prices could last all the way through 2027. In the worst-case scenario, the bank estimated that Brent prices would be around $111 per barrel by the fourth quarter of 2027 if oil supply through the strait remained very low for over two months and production stayed at 2 MMBPD after reopening. (CNN)
 

Energy Market Technicals

The stochastic momentum indicator for the energies basis the May daily charts has turned downward. WTI's RSI has fallen back below 70, thus suggesting that the contract is not overbought. The RSI for RB remains at 78 and that for ULSD is 80, thus still indicating an overbought condition.

Even as momentum turns downward, the May WTI futures have a sideways look to the trading pattern of the past several sessions. WTI was set to fall about 2% in ⁠its first weekly decline in five weeks. Brent spot futures are set to end the week up about 7%. May WTI has support at 91.82-91.88 and then at 88.71. Resistance is seen at 97.25-97.31 and then at 99.16-99.29.

Natural Gas Market Overview

Natural Gas--NG is down 9.3 cents at $3.073
NG futures are lower ---following the crude oil price fall. Yesterday's EIA storage data disappointed. Today is the beginning of spring, reinforcing the shoulder season's lower demand period.

US dry gas consumption is estimated down another 8.1 BCF/d today at 76.28 BCF/d and just below the seasonal five-year average of around 80.4 BCF/d, Bloomberg data shows.

Yesterday's EIA gas storage data showed a build of 35 BCF. That was 4 to 9 BCF more than the survey estimates from WSJ and Reuters. Total storage rose to 1.883 TCF. That put storage 177 BCF/10.38% over year ago level. The deficit to the 5 year average flipped to a surplus with this week's data. The surplus to the 5 year average stood at 47 BCF (+2.56%). The larger than forecast build was due to low natural gas power demand during the reporting week, with wind power generation having risen by 39%. Heating demand was down 32% on the week. (NGI)

Lower US 48 states dry gas production is estimated  today at 112.66 BCF/d compared to a 30-day average of 113.49 BCF/d, BNEF data shows.

Yesterday the cash futures price differential was near flat in mid-morning trading. This was versus the +9.5 cent premium for the cash seen Wednesday. We see the narrower differential being a function of the futures being bolstered by the Iran war and the outage of LNG production expected in Qatar in the coming years. QatarEnergy, the state-owned operator of Ras Laffan, said Thursday that the missile attacks reduced the country’s export capacity of liquefied natural gas by 17% (about 13 million tons/year) and that it could take up to five years to repair, impacting supply to markets in Europe and Asia. (CNN/Bloomberg)

Notable options activity seen Thursday on the CME saw the initiation of November December one month CSO call positions. The - 60/-70/-80 cent butterfly traded 1.6 cents. In the September options, the $7/$8/$8.75 call butterfly traded 0.85 cents with the $7 and $8 calls being opening positions.

Technically NG still has negative momentum, although it basically remains stuck in the trading range seen this month. Support below comes in at 2.998-3.006 and then at 2.920-2.923. Resistance lies at Thursday's high at 3.270-3.280.

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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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