Daily Energy Market Update December 8,2025

Liquidity’s Daily Market Overview

Energies are lower even as the news wires tout the difficulty at finding a peace agreement in the Ukraine conflict and the market is expecting a rate cut by the Fed this week. Both of these elements are supportive. Also, news wire reports mention the increase in Chinese refinery runs.

The Group of Seven countries and the European Union are in talks to replace a price cap on Russian oil exports with a full maritime services ban in a bid to reduce the oil revenue that helps finance Russia's war in Ukraine. (Reuters) An end to the price cap will likely make it that more difficult for buyers of Russian oil to secure barrels. Russia exports over a third of its oil in Western tankers - mostly to India and China - with the use of Western shipping services. The ban would end that trade, which is mostly done through the fleets of EU maritime countries including Greece, Cyprus and Malta. (Reuters) Also, a Ukraine peace deal seem elusive as Russia, over the weekend, launched several attacks on Ukraine. 

The market is keying on the Federal Reserve's decision Wednesday regarding a possible interest rate cut. This has been a factor supporting the energy market the past few sessions. Markets are pricing in an 84% chance of a quarter-point cut at the Fed meeting on Tuesday and Wednesday, LSEG data shows. (Reuters)

India will continue purchasing oil from sources that are economically advantageous to ensure its own economic interests, according to a statement from the Kremlin on Monday. The statement comes after Russian President Vladimir Putin visited New Delhi last week, where he offered India uninterrupted fuel supplies.  (Investing.com)

Reuters commentary of a few days ago says that Chinese smaller, independent teapot refiners are buying discounted Iranian crude held in onshore storage tanks using newly issued import quota to swiftly raise their output, trade sources and analysts said, easing a supply glut. Last week, Beijing issued in advance the first batch of crude oil import quota for 2026 of about 8 million tons (58.4 MMBBL) to 21 refiners, although one Chinese crude buyer said the volume is small enough that it would be exhausted by the end of this year. As a result, operating rates at Shandong teapots climbed to 61.3% in the week to December 3, after holding at around 50% in the previous months, according to Chinese consultancy JLC. "We have revised up our December China runs forecast by 150 MBPD." said Energy Aspects. Teapots are buying Iranian crude from bonded storage tanks because it takes only a few days to reach their plants. Iranian light crude from Shandong bonded tanks was recently sold at discounts wider than $8 per barrel to ICE Brent, versus about $6 in September, trade sources said. China's appetite for Russian oil remained weak as state refiners have suspended purchases on sanctions fears, depressing flagship Russian ESPO Blend crude to its widest discount ever at over $6 a barrel to ICE Brent, trade sources said.

Russian fuel oil discharges in Singapore have surged to a record high in 2025, according to tanker tracker data, despite intensifying Western sanctions on Moscow's maritime energy trade. The development underscores the resilience of Russian supply chains and could signal sustained availability of lower-cost feedstock for regional fuel oil blending operations. This year's discharge of Russian fuel oil and residues were discharged in Singapore through Dec. 3 this year, representing a more than 40% increase from the same period in 2024. This marks the highest annual volume since CAS began tracking the data in 2016. While market participants noted that Russian fuel oil is not "illegal," dealing with it comes with high compliance risk under the EU price cap restrictions, a Singapore-based maritime lawyer said.   (Platts)

The Baker Hughes oil rig count rose by 6 units in Friday's report.

The U.S. national retail gasoline price continues to fall. Today the AAA says the price is $2.952. One month ago it was $3.073. The price is at its lowest since May, 2021, as per GasBuddy. GasBuddy said recently that the gasoline price was being pressured by the drop in crude oil prices, weaker seasonal demand and increased production, evidenced by the sharp rise in refinery utilization seen in recent weeks.

Energy Market Technicals

Technically WTI still looks range bound, after testing resistance at 60.44-60.48 with the high Friday of 60.50. WTI DC chart based momentum is positive, although it looks headed to a neutral condition.

In the WTI spot futures, above the 60.44-60.48 level, next resistance lies at 61.03-61.09. Support comes in at 58.81-58.83 and then at 58.27-58.28.

Natural Gas Market Overview

Natural Gas--NG is down 31.2 cents at $4.979
NG spot futures are down sharply as weather models are not cold enough to sustain the recent rally. The market is also down after being technically overbought. US natural gas production remains strong.

Average Lower 48 temperatures are forecast to briefly rise just above normal on Dec. 10 before dropping back below but with a warmer trend suggested after Dec. 17, as per NOAA data. NatGasWeather sees the following demand over the next 15 days: High days 1-2 / Moderate days 3-5 / High days 6-8 / Moderate to low Days 9-15.

US domestic natural gas production is estimated down 0.389 BCF/d today, but is still strong at 113.1 BCF/d, compared to the 30-day average of 112.2 BCF/d, according to BNEF.

Comments heard over the past few days regarding natural gas prices. One technical analyst we respect said : "$5.50 was all it could do. It's still a buy in the 5.00 to 4.90 area."  Another market analyst said:" the technical chart suggests limited upside: Friday's daily candle indicates bullish exhaustion, making a move above $5.500 challenging." While another colleague says: "The models keep shifting colder and colder. If this is correct we will test the $6 option strike next week." He notes that the January $6.00 call  option open interest on the CME is very large; the CME January LN $6.00 call option open interest is 42,495 contracts as of Friday's close. No other January call option has open interest over 29,000 contracts.

Early estimates we have seen for this week's EIA gas storage data are calling for a draw of 169 BCF. This is 2 BCF more than was taken out of storage last year. Yet, it is 80 BCF better than the 5 year average draw for the period.

On Friday, LSEG projected average gas demand in the Lower 48 states, including exports, would fall from 144.4 BCF/d this week to 141.4 BCF/d next week before rising to 143.4 BCF/d in two weeks. The forecasts for "this" week and "next" seen Friday were down a total of 1.3 BCF/d from those seen Thursday.

The January call open interest on the CME rose by a total of 23,682 contracts in Friday's session. The total January put open interest on the CME rose by 46,445 contracts in Friday's activity.  The January $4.80/$4.50/$4.20 put butterfly traded at a cost of 3.6 cents to the buyer of the wings. The January $7.00/$7.50/$8.00 call butterfly traded 0.8 cents to the buyer of the wings. The January $4.75/$4.25 put spread traded 6.2 cents with delta penultimate day futures buys at $5.40. The January, February and March $15.00 calls traded 0.8 cents. In the March April CSO, the 25 cent/50 cent call spread traded 3.1 and 3.2 cents. The March April futures spread settled Friday at a 5 month high at 20.0 cents. In the October 2026 options, the $2.75/$2.25 put spread went in a 1 by 2 ratio with the $2.75 put buyer paying 1.5 cents. The October 2026 futures settled at $4.398 on Friday.

The Baker Hughes gas rig count fell by 1 unit in Friday's report.

The NG spot futures ended the week up 9.05%. The contract has been up 7 weeks in a row. We see a few technical elements that reinforce that a peak in NG spot futures occurred Friday. CME NG futures volume was 1,093,353 contracts. Tops and bottoms are punctuated by large volume. The DC and Weekly chart momentums have turned negative from an overbought condition. Last week, the Weekly chart momentum was 100 by 100, as overbought as the indicator could get. The NG spot futures settled again Friday with a mean reversion setup. The DC chart's upper bollinger band lies at $5.210.

NG spot futures support at 5.024-5.027 has been broken this morning. Below that support is seen at 4.942-4.945. Resistance comes in at 5.134-5.140 and then at 5.226-5.229. The overnight high is 5.205.

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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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