Daily Energy Market Update December 10,2025

Liquidity’s Daily Market Overview

The word of the day describing crude oil prices is "steady". Crude oil is up a little after slipping to a 2 week low overnight. The API data was supportive for crude with a draw of 4.8 MMBBL, better than the forecast for a draw of near 2 MMBBL. Gasoline supplies rose by 7 MMBBL, which is the largest weekly build seen since January 2022. RB spot futures are trading lower after falling to a fresh low for recent activity. A Fed rate cut is expected at today's meeting.

The EIA's STEO monthly report had very few changes from last month. Notable was the decrease in global oil demand for 2025 of 200 MBPD to 103.9 MMBPD along with a 200 MBPD increase in global output for 2025 to 106.2 MMBPD. 2026 global demand and production were left unchanged form last month's report at 105.2 MMBPD and 107.4 MMBPD respectively.  The EIA said :"We expect global oil inventories to continue to rise through 2026, putting downward pressure on oil prices in the coming months. " But, they added : " both the OPEC+ production policy and China’s continued inventory builds will limit price declines.". The EIA raised their 2025 and 2026 price forecasts for WTI by 17 and 16 cents from those made in November. WTI is seen averaging $65.32 in 2025 and $51.42 in 2026. The EIA's US Crude production forecast for 2025 was increased by 20 MBPD to 13.61 MMBPD, but was lowered for 2026 by 50 MBPD to 13.53 MMBPD. The 2025 production figure is a new record output volume. But, the EIA expects oil production to come under pressure next year, given the low price environment and the slowdown in drilling activity.

API                Forecast       Actual
Crude Oil    -1.6 /-2.3       -4.78
Gasoline     +2.0/+2.8       +7.0
Distillate     +0.8/+1.9      +1.03
Cushing          n/av            -0.89
Runs           +0.2/+0.3%     n/av
Crude oil inventories in the United States are so far showing a net increase of just 121,000 barrels for the year, according to Oilprice calculations of API data.

ING wrote : "While Russian seaborne export volumes are holding up well, these barrels are struggling to find buyers. So, we are seeing increasing volumes of Russian oil at sea. Obviously, this is not sustainable. We need to see steeper discounts on Urals to attract buyers and/or Russian buyers, ensuring they are not dealing with sanctioned entities. If these fail, we will likely have to see Russian oil output starting to fall." Oil Price says that a Rosneft oil cargo has gone unsold for weeks. A cargo of crude oil from sanctioned Russian giant Rosneft has made an 11-week-long meandering trip around Europe and Asia in search of buyers and although it has anchored off a sanctioned Chinese import port, it’s not certain it has reached its final destination yet. The three-month long trip and the ship-to-ship (STS) transfer suggest that buyers, especially in India, are steering clear of the sanctioned Russian companies and their cargoes, Oil Price adds.

The AAA retail gasoline price at the pump has fallen to a fresh low for recent data. Today's price is $2.940. One month ago it was $3.071. Yesterday, the EIA issued its weekly retail gasoline price update. They said that the price was $2.94 this week, which is the lowest price seen since the May 3, 2021 price of $2.89.

Energy Market Technicals

Technically WTI momentum has turned negative, although overall the recent trading range for prices remains intact.

WTI spot futures see support at 57.34-57.38 and then at 56.35. Resistance lies at 59.64-59.67 and then at 59.97-60.02.

Natural Gas Market Overview

Natural Gas--NG is up 20 cents at 4.594
NG futures are up slightly now after overnight continuing their retreat from the multi year high seen last Friday as weather models have dialed back a lot of the colder weather in the forecast. The drop in futures prices overnight came even as the EIA yesterday raised their winter price forecast.

On Tuesday, Celsius Energy said that "the last 72 hours have been very damaging for the near-term Gas-Weighted Degree Day (GWDD) outlook, both from the ECMWF & GFS models. 14-day accumulated GWDDs have fallen by at least 75 GWDDs, largely due to much milder temperatures in the 7-14 day period.

The EIA in their monthly STEO kept 2025 US NG demand unchanged at 107.7 BCF/d, while raising their 2025 gas demand forecast from last month by 0.2 BCF/d. But their forecast for 2026 lowered US NG demand by 1.0 BCF/d to 90.8 BCF/d, while at the same time raising their 2026 NG production estimate by 1.3 BCF/d to 109.1 BCF/d. They see the 2025 HH NG average price at $3.56--up 9 cents from last month's forecast, while lowering the 2026 HH NG price forecast  by 1 cent to $4.01. The EIA wrote :" The Henry Hub natural gas spot price in our forecast rises to an average of almost $4.30 per million British thermal units (MMBtu) this winter (November–March), more than 40 cents/MMBtu higher than we forecast in our November STEO. The revision is driven primarily by colder-than-expected weather in December which we expect will increase space heating demand. However, we expect milder-than-normal weather in early 2026 and rising production will help moderate natural gas prices following the winter, with the Henry Hub price averaging about $4.00/MMBtu next year."

The TTF European natural gas futures fell today to their lowest level since April 8,2024. Today's low of 26.645 Euro equates to $9.08 / MMBtu. ING commentary this morning suggests that TTF prices have found a floor. The European gas market has been under significant pressure, amid aggressive selling by speculators. This is despite EU gas storage recently falling below 72%, compared with the 5-year average of 82% for this time of year. The weakness in TTF should lead to slower LNG flows into Europe, with JKM’s premium to TTF widening in recent weeks. Meanwhile, the broader weakness in Europe has seen gas prices trading down towards the long-run marginal cost for US LNG producers. If these price levels persist, they will likely raise more questions about the viability of pre-final investment decision export projects.

In LN/NG options activity on the CME on Tuesday, the January $5.50/$6.00 call spread traded 2.5 cents with .06 delta futures sales at $4.58. The March $5.00 call was bought against selling of the $3.00 put for a cost of 2.1 cents, with 0.30 delta futures sales at $3.71. The March $7.00 call was sold against buying of the $3.00 put for a cost of 5.4 cents with 0.22 delta futures bought at $3.77. The March $5.50 call was sold against purchases of the $3.25 puts at a cost of 6.4 cents with 0.36 delta futures bought at $3.78. The $4.50 call was sold with the $3.50 put bought at a cost of 4.8 cents with 0.66 delta March futures bought at $3.78. The January February CSO 10/25/35 cent put butterfly traded 3.0 cent cost to the buyer of the wings. The trade contributed to the 25 cent put open interest falling by 2,690 contracts. The January February 25 cent put traded in some size at 3.2 and 3.3 cents. The February March CSO 15/30/45 cent put butterfly traded 3.5 cent cost to the wing buyer. The February March 30 cent put open interest rose by 3,000 contracts.

Comments heard the past 24 hours re the sharp drop in NG prices include: " Setting up a whiplash maneuver."  "But just as this market overextended itself on the upside at the end of last week, we are viewing this week's decline as an exaggeration that could be sowing the seed for another sharp price up-spike on first suggestion of a renewed late December or early January cold spell. "Probably a small buyer either side of $4.50."

Tuesday's settlement made for a 13.5% drop off the Friday settlement. The January daily NG chart shows some decent support in the 4.429-4.443 area. Below that support is seen at 4.314-4.320. Resistance comes in at 4.627-4.630 and then at 4.736-4.746.

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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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