Daily Energy Market Update December 4,2025

Liquidity’s Daily Market Overview

Crude oil is higher today due to the lack of progress towards a peace agreement in the Ukraine conflict. We see crude supported by the DOE data as there was a large increase in crude inputs to refineries and a drop in net crude oil imports, even as the headline number for crude inventories showed a small build versus the expectations for a small draw. Weak jobs reports this week are also seen supporting crude prices as a Federal Reserve rate cut is being expected more.

Ukraine hit the Druzhba oil pipeline in Russia's central Tambov region, a Ukrainian military intelligence source said on Wednesday, the fifth attack on the pipeline that sends Russian oil to Hungary and Slovakia. Although the pipeline operator later said supplies were moving through the pipeline as normal, the news has revived concerns over potential disruptions to Russian oil exports. Ukraine’s drone campaign against Russian refining infrastructure has shifted into a more sustained and strategically coordinated phase," consultancy Kpler said in a research report. "This has pushed Russian refining throughput down to around 5 million barrels per day between September and November, a 335,000 bpd year-on-year decline, with gasoline hit hardest and gasoil output also materially weaker," the report added. Additionally, the lack of any progress in talks this week between US envoys and the Russian President is seen as supporting crude prices. (Reuters/Investing.com)

The DOE data seen Wednesday was supportive for crude oil in that refinery runs rose quite a bit and net crude imports fell. Crude inputs to refineries rose on the week by 433 MBPD to a total of 16.876 MMBPD--just below last year's total for the week of 16.910 MMBPD--but well above 2023 crude inputs totaling 16.201 MMBPD. Net crude imports fell by 470 MBPD, which is due to exports rising by 456 MBPD. Given the crude input and net crude import data, it is hard to justify the 0.57 MMBBL crude inventory build. The EIA's adjustment adding 545 MBPD of crude supply is a partial answer to a crude build. Distillate demand rose on the week by 68 MBPD to 3.430 MMBPD--beating last year's demand for the week by 32 MBPD, but lagging 2023 demand by 326 MBPD. Distillate stocks rose by 2.06 MMBBL, which was more than expected. Gasoline supplies also rose more than expected. They rose by 4.518 MMBBL. Part of this is due to the 400 MBPD drop in demand to 8.326 MMBPD. This week's demand was lower than ast year's by 412 MBPD and lower than 2023's by 140 MBPD.

ADP private sector jobs data for November came in weaker than forecast. Private-sector employers cut 32,000 jobs in November, ADP said. Dow Jones was forecasting a 40,000 gain. Small businesses were hit the hardest. Futures traders are assigning a nearly 90% probability that the central bank will approve another quarter percentage point cut in its key interest rate. The ADP data supports a possible Fed rate cut, when they meet on December 9-10. The Bureau of Labor Statistics will release its take on the Nonfarm Payrolls picture on Dec. 16, a date delayed because of the government shutdown. (CNBC)

The national retail average gasoline price fell today to a further low for recent price action. The AAA says the average is $2.991.

Energy Market Technicals

Technically momentum is positive for the WTI on the DC chart, even though the contract has been stuck in a range for the past month or so and has a sideways price pattern. RB momentum on its DC chart is negative, though very nearly oversold. ULSD momentum is neutral and is oversold.

WTI spot futures see support at 58.27-58.30 and then at 57.66-57.68. Resistance lies at the prior 2 sessions' highs at 59.64-59.67 and then best at 60.44-60.48.

Natural Gas Market Overview

Natural Gas---NG is down 4.9 cents at $4.946
Natural gas futures are lower now after climbing overnight to a fresh multi year high as cold weather forecasts continued to boost sentiment. But, some question whether the storage surplus to the 5 year average, which will widen today, is a possible headwind for the contract. Technically the contract is getting overbought.

The EIA storage data is seen as a draw of 14 to 18 BCF as per WSJ and Reuters surveys. This compares to last year's draw of 26 BCF and the 5 year average draw of 43 BCF.   "Forecasts for the coldest December since 2010 may tip storage into a deficit by Christmas," trading firm EBW Analytics wrote in a note to clients. (WSJ)

Demand for heating is likely to remain strong "as a frosty weather system tracks across the northern" U.S., NatGasWeather wrote Wednesday.

Open interest in NG futures on the CME rose by 24,205 contracts in Wednesday's trading. The whole strip from March 2026 to April 2027 saw increases. We see this as mostly new longs being established.

The TTF European gas spot futures fell today to their lowest value since April 10,2024. Since January, European gas prices are down more than 45%. As of November 30, European inventories were 75% full, roughly 10% below the five-year average. In Germany, Europe’s largest gas market, storage levels are even weaker at just 67%, more than 20% below seasonal norms. With Asian demand relatively weak and US export capacity strong, Europe has become the primary destination for American LNG. The strong inflow of LNG into Europe is seen as the main driver to falling prices. Goldman Sachs expects rising global supply — particularly from the US — to lift European storage levels and gradually push TTF and prices lower, forecasting TTF at €29/MWh in 2026 and €20/MWh in 2027. Goldman adds that by 2028–2029, storage congestion in Northwest Europe could drive TTF as low as €12/MWh, closing the US LNG export arbitrage and forcing cancellations of American cargoes. Today, TTF spot futures are trading Euro/Mwh 27.420, which equates to $9.38/MMBtu. The contract has been sliding along the lower bollinger band for the past 10 sessions. Momentum is near oversold. Support is seen at 27.165 and then at 26.160 Euro/ Mwh from data from April, 2024. The best upside resistance we see lies at Euro/Mwh 30.255.

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