Daily Energy Market Update December 22,2025

Liquidity’s Daily Market Overview

Energies are higher as the US seized a 2nd oil tanker near Venezuela over the weekend. Talks to end the war in Ukraine continue as "tensions in Russia's war against Ukraine remained high", as per Reuters reporting.

On Saturday, the US Coast Guard intercepted the Centuries tanker in international waters off the coast of Venezuela. The U.S. Coast Guard is pursuing an additional oil tanker in international waters near Venezuela in what would be the second such operation over the weekend and the third in less than two weeks if successful, officials told Reuters on Sunday.

U.S. special envoy Steve Witkoff said on Sunday that talks between U.S., European and Ukrainian officials and separate talks with Russian negotiators had been productive. However, the top foreign policy aide of Russian President Putin said that changes made by the Europeans and Ukraine to U.S. proposals had not improved prospects for peace. (Reuters)  Putin told his annual press conference on Friday that Russia does not believe Ukraine is ready ‌for peace talks. (Market News)

The Baker Hughes oil rig count seen Friday showed a drop of 8 units, with 3 units dropped in each of the Permian and Haynesville basins.

The DOE oil data normally due out Wednesdays will not be released until next Monday December 29 at 10:30 AM (EST) due to the fact that the Federal government has made Christmas Eve and the day after Christmas official days off for Federal workers. The API weekly data will be issued at its regular time Tuesday afternoon.

On Friday, the CFTC released its COT report for the week ended December 9. The report showed money managers added over 40,000 contracts of net length in WTI futures/options on the CME and thus turned from net short to net long over 10,000 contracts in WTI futures/options. Money managers remained net short over 22,000 contract in WTI on ICE. RB net length fell by over 10,000 contracts in Friday's CFTC data as long positions were sold. 

The retail gasoline and diesel prices at the pump in the U.S. have fallen further today. The average gasoline price as per AAA data is $2.855. One month ago that price was $3.079. The average diesel price is said to be $3.588, versus that of 3.796 seen one month ago

Market News reported on Friday that the near-term crude options skews have narrowed to the least bearish since Nov. 18 driven by a rally in call volatilities. They add that put volumes outpaced call options volumes in Brent crude last week.

WTI is expected to average $52/bbl next year. amid an oversupply of about 2 MMBPD, assuming no large supply disruptions or OPEC production cuts, Goldman Sachs said cited by Bloomberg. SocGen sees a “full return to contango” for WTI early in the New Year despite the Venezuela situation, according to a note cited by Bloomberg. SocGen analysts see a significant glut in inventories through 2026 with a 3.16 MMBPD build in Q1.

The CME will close early Wednesday at 1:45 PM (EST) with the settlement period for Wednesday occurring from 1:28 to 1:30 PM (EST). The CME platform will then re-open at  6 PM (EST) Thursday/Christmas day and stay open until 5 PM Friday.

Energy Market Technicals

The energies are now trading well above the prior 4 sessions' lows with momentum having turned positive with the rally.

WTI spot futures see support at 57.01-57.03 and then at 56.35-56.40. Resistance lies at 58.72-58.80 and then at 59.41-59.42.

Natural Gas Market Overview

Natural Gas--NG is down 4.7 cents at $3.939
NG spot futures are lower now, after having originally gapped up overnight as weather models added demand. But, the NOAA 6-14 day forecast still shows warm weather across most of the country, as per Market News reporting. Thus prices have fallen back --well off the overnight high.

The EIA natural gas storage data normally due out Wednesdays will not be released until next Monday December 29 at Noon (EST) due to the fact that the Federal government has made Christmas Eve and the day after Christmas official days off for Federal workers. The report for the week ended December 19 is estimated to show a draw of 170/170.5 BCF as per early estimates seen. Last year saw a draw of 98 BCF for the period and the 5 year average draw for the period is 110 BCF.

US domestic natural gas production is estimated today at 114.0 BCF/d compared to the 30-day average of 113.4 BCF/d, according to BNEF data.

The Baker Hughes natural gas rig count was unchanged in Friday's report. But, we point to the oil rig count dropping by 8 units in Friday's report as having an effect on natural gas going forward due to associated gas production. This notion is elaborated below in Bernstein's view of gas pricing for 2026. 

Friday's settlements for NG futures on the CME showed the January and February contracts ending higher on the session, while the strip from March 2026 through June 2027 ended slightly lower. We wonder if the higher settlement in January was as much about short covering and liquidation of positions due to the shortened holiday trading hours and the impending expiration of the options this Friday and the futures next Monday.

The CFTC COT report issued Friday for the week ended December 9 showed money managers reduced their net short positioning in NG futures/options on the CME by just over 9,000 contracts after in the prior week reducing it by over 25,000 contracts. As of December 9, money managers were net short a total of 30,862 contracts. 

Australia will make exporters of LNG from the country’s east coast keep up to a quarter of their output for domestic use from 2027, under a scheme unveiled on Monday to curb price spikes and help fill a long-forecast supply gap. Australia exports far more gas than it consumes, and the competition regulator warned on Monday that the expected local shortfall had widened, with output dropping from legacy fields off the south coast.  (Reuters)

The investment company Bernstein expects U.S. natural gas markets to regain footing in 2026, reiterating confidence that $5  remains the long-term mid-cycle price. LNG exports are central to that view, with Bernstein pointing out that current U.S. LNG volumes are at record levels, around “5 BCF/d above a year ago,” and that growth forecasts to 2030 are higher than previously expected. With regard to supply, the Haynesville basin is “near 5-year lows in terms of volumes,” with rig counts also depressed and “an 8-month lag between activity and volumes,” meaning much of 2026 supply is already set at lower levels. (Investing.com)

Technically, NG futures remain in the range seen over the past week punctuated by the double top at 4.218 and the double bottom at 3.840 / 3.842. Some light resistance is seen at 4.151-4.158, which was almost tested with the overnight high of 4.140. Some light support comes in at 3.913/3.920. Momentum is trying to turn positive.

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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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