Daily Energy Market Update December 2,2025

Liquidity’s Daily Market Overview

Crude oil prices are lower, although the watchwords being used today in news wire accounts are "steady" and "firm". The underlying themes remain the same as seen yesterday--some concern over Russian and Venezuelan crude supplies and ongoing talks aimed at a Ukraine peace deal.

Geopolitical tension has been heightened slightly today as a tanker carrying Russian oil has been attacked around 130km off Turkey's Black Sea coast, the third such incident in the last few days. The Turkish maritime authority reports a tanker carrying sunflower oil from Russia to Georgia was attacked in the Black Sea. On Monday, Turkish President  Erdogan spoke out against Ukraine’s drone attack last Friday on two Russian vessels, saying it signaled a “worrying escalation” of the conflict.  (ABC News)

On the Ukraine peace negotiation front, Trump's special envoy, Steve Witkoff, and Trump's son-in-law Jared Kushner will meet Russian President Putin on Tuesday for talks on a possible way to end the war. (Reuters) President Zelenskyy has noted that an agreement on territory is going to be very difficult, as Ukraine is not prepared to cede unoccupied areas to Russia. (Market News) Today, the NATO leader said that he hopes for a Ukraine peace deal before the NATO summit in July, thus underscoring that a deal is not imminent. (Bloomberg) 

Venezuela’s President Maduro is running out of options to step down and leave his country under U.S.-guaranteed safe passage, following a short call with President Trump last month where Trump refused a series of requests from the Venezuelan leader, according to four sources briefed on the call. (Reuters)

A Kremlin spokesperson told Indian journalists on Tuesday that a decline in India's oil imports from Russia may last only for "a brief period" as Moscow plans to boost supplies to New Delhi. Russia is the top oil supplier to India. But, India is said to be set to lower its Russian oil purchases to at least a three-year low this month, after Washington sanctioned Moscow's top oil producer Rosneft and Lukoil.  (Reuters)

Exxon Mobil has approached the Iraqi oil ministry to express its interest in buying Russian firm Lukoil’s majority stake in the giant West Qurna 2 oilfield, five Iraqi official sources with direct knowledge of the matter told Reuters.

Energy Market Technicals

ULSD's DC chart based momentum seems poised to turn upward from an oversold condition. WTI momentum is positive, while that for RB is pointing downward slightly.

WTI has resistance from the high today and last Friday at 59.64-59.67. Above that resistance lies at 60.44-60.48. Support comes in at 58.27-58.30 and then at 57.66-7.68.

Natural Gas Market Overview

Natural Gas--NG is down 4.1 cents at $4.880
NG futures are lower now after  they had traded overnight to the best spot futures value since December 28, 2022.  A bullish narrative pushed prices higher, with one commentary noting: that traders have been responding to the strongest pre-winter demand since 2021. Additionally the record amount of LNG feed gas for export has boosted gas values of late. Also, gas production fell some Monday. Yet, today news shows Northeast week-ahead weather to be warmer than normal, as per Market News reporting.

On Monday, news was seen that projected that U.S. heating demand for the week ending Dec 6 was forecast to be 19 heating degree days (HDD) above the long-term normal, according to Bloomberg, citing the NOAA. Reuters added : " Meteorologists forecast temperatures across the country will remain mostly colder than normal through December 16."  On Monday, forecasts shifted colder across the eastern two-thirds of the US and warmer across the West for Dec. 6-10, as per weather forecasting group Atmospheric G2.

NGI had a headline yesterday that read: "  ""‘Exceptionally Volatile’ Trade Expected as Natural Gas Market Awaits Weather Clarity."  Volatility was very evident in the next day Henry Hub (HH) cash trading Monday morning. In a 20 minute period the cash price fell from $5.12 to $4.85. The cash futures differential had flipped to a premium of 26 cents ( favor of the cash) when the HH  traded $5.12. That premium fell to about 2 cents when the cash price retreated. The cash had traded at a discount to the spot futures of about 5.5 cents mid-week last week. Next day cash gas prices at the Henry Hub have fallen back today to trade at a 4 to 5 cent discount to the spot futures; HH traded $4.80 versus January NG futures printing $4.842-4.848.

On Monday, LSEG projected average gas demand in the Lower 48 states, including exports, would fall from 142.0 BCF/d this week to 139.7 BCF/d next week. These forecasts were up a total of 4.6 BCF/d from those seen Friday.  Lower 48 natural gas demand is estimated 0.297 BCF/d lower today at 114.6 BCF/d to remain near the highest since February seen yesterday, Bloomberg shows. The five-year seasonal average is around 91.1 BCF/d.

LSEG said average gas output in the Lower 48 states rose to a record 109.6 BCF/d in November. That is down 0.1 BCF/d from their average for November seen as of last Friday.  U.S. domestic natural gas production is estimated 0.132 BCF/d lower today at 112.72 BCF/d compared to a record high of 114.0 BCF/d on Nov. 30 and the 30-day average of 111.8 BCF/d.  (BNEF)

Average gas flows to the eight big LNG export plants operating in the U.S. rose to a record 18.2 BCF/d in November. That is up from the average November LNG volume seen last Wednesday of 18.1 BCF/d.

Celsius Energy analysis saw Monday's gas storage inventories drawing by over 25 BCF as wind generation slackened & colder temperatures settled into the Deep South & East. They further projected that the next 7 days would see strong withdrawals of 20 BCF/d or more.

There were notable large options trades and open interest increases seen Monday on the CME in the February/March one month Calendar Spread Options (CSO) and the June calls. The February March 35 cent call was bought against which both the 50 cent call and 25 cent put were sold for a cost to the 35 cent call buyer of 0.8 cents. Also in the February March CSO, the $1.50 call traded 13.5 cents. The $1.50 call in the February March CSO was also bought as a part of a butterfly with the 35 cent call having been bought against which twice as many $1.00 calls were sold for a total cost of 8.3 cents to the wing buyer. A very large amount of new open interest was seen in the June $5.25 and $6.25 calls. A trade occurred with the $5.25 call bought against selling of 1.5 as many of the $6.25 calls with a small (.o6) delta amount of June futures sold at $3.86.

Technically, again on Monday, the spot futures had a mean reversion set up, having settled over the DC chart upper bollinger band. That band lies at $4.830. Momentum basis the DC chart remains positive, although as we noted yesterday, the weekly continuation chart's momentum is overbought. Resistance at 4.990-4.994 was almost tested with today's high being 4.984. Support below comes in at 4.811-4.815 and then at yesterday's low at 4.754-4.758.

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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