Daily Energy Market Update February 17,2026

Liquidity’s Daily Market Overview

The energies are lower now as Iran's Foreign Minister said that they have reached an understanding on the main principles with the US. This has seen crude oil fall over one dollar n a short space. Energies had been higher overnight on some concerns revolving around the Straits of Hormuz and Ukraine Russian talks. 

Parts of the Strait of Hormuz will close for a few hours on Tuesday due to 'security precautions' for shipping safety, an Iranian news agency reported, as the Revolutionary Guards conduct military drills in the waterway. (Reuters) Additionally, the UK Navy said that they got a report of an incident near Aden/Yemen. This is near to the Strait that leads to Saudi Arabia and the Red Sea. The report was of a small arms fire exchange between a UK ship and a skiff. (Bloomberg)

Ahead of the Russia-Ukraine talks, Ukrainian attacks on Russian energy infrastructure continue. The Ukrainian military said on Tuesday that it had struck the Ilsky refinery, while a drone attack was also reported at the port of Taman, which is at the head of the Black Sea. And Russian forces pounded Ukrainian power infrastructure before a new round of peace talks. President Zelenskiy condemned the overnight strikes on 12 Ukrainian regions that came under attack hours before the scheduled start of U.S.-backed trilateral talks. (Reuters)

Diesel shipments from the US to Europe are accelerating in February 2026, with arrivals expected to rise 25% to 366 MBPD, marking the highest level since December 2024. This surge is driven by tighter European regional balances and the reopening of the transatlantic arbitrage, supported by improved US refinery utilization and falling freight costs.  Supply in Europe has tightened following a January 21 deadline that restricted imports of refined products derived from Russian crude. The transatlantic ULSD arbitrage, which had previously closed due to cold weather impacting US export availability, has reopened.  Strong diesel cracks and improved refining margins, aided by lower sour crude costs, are encouraging higher US production.  (Quantum Commodities)

A report surfaced in the past days that had Presidents Trump and Netanyahu having agreed at a White House meeting that the U.S. would work to reduce Iran's oil exports to China, Axios reported. China accounts for more than 80% of Iran's oil exports. (Reuters)

India has seized three U.S.-sanctioned oil tankers linked to Iran this month and stepped up surveillance in its maritime zone to curb ‌illicit trade, a source said on Monday. India is aiming to prevent its waters from being used for ship-to-ship transfers that obscure the origin of oil cargoes.  (Reuters)

Many Asian markets were closed on Tuesday for Lunar New Year holidays, including mainland China, Hong Kong, Taiwan, South Korea and Singapore, thus reducing trading volumes. "Thin liquidity due to Lunar New Year holidays has limited broader price moves," ING analysts say.

The WTI/LO March options expire today. The $63 calls had 10,003 contracts open as of Friday's close, while the $65 call strike had 23,779 contracts open. There are no nearby expiring put option strikes with over 10,000 contracts open.

The weekly petroleum data from the API and DOE will be issued a day later than normal this week due to yesterday's President's day holiday. Thus, the API data will be issued Wednesday evening and the DOE data will be released Thursday at Noon (EST).

Energy Market Technicals

Momentums remain negative for the energies, although the price action has a continued sideways pattern.

Spot WTI futures see support at 62.14-62.20 and then at 61.21-61.25. Resistance lies at 64.71-64.74 and then at the DC chart's double top at 66.42-66.48.

Natural Gas Market Overview

Natural Gas--NG is down 16.3 cents ( from Friday's settlement) at $3.080
NG futures are still lower versus Friday's settlement but well off the low seen Sunday evening. Weather forecasts have added back a decent amount of HDD's in the latest runs.

The GFS 6z (US 2 AM time) 15day forecast added 22 HDD nationally driven primarily by early March. But, a weather run from just a few minutes ago (8AM EST) saw some HDD dropped.

The overnight rally comes even as gas inventories are seen rising back to a surplus versus last year's level, and is also seen possibly flipping to a surplus versus the 5 year average. Celsius Energy reports that by the end of the week, the surplus to last year will be in excess of +100 BCF. Last week's EIA data had the deficit to last year at 97 BCF as of February 6th.

Lower 48 states dry gas production is currently estimated 0.47 BCF/d lower today at 114.37 BCF/d; but, that is up from an average of 114.1 BCF/d over the previous week, BNEF shows.

The WSJ had an article mentioning how the updated outlook from the NOAA's Climate Prediction Center forecasts a potential El Nino climate setting in next fall/winter, which could bring a mild winter for much of the U.S., thus limiting demand. "Market participants appear to be hedging some downside risk as they extrapolate that the chances of the weather pattern and its associated mild temperatures materializing should remain high into the winter months," says Gelber & Associates in a note. The NOAA's report gave a 61% for El Nino to set in beginning in September.

The Desk's latest survey of end of March 2026/EOS gas in storage rose by 79 BCF to 1.748 TCF. That compares to the EIA's estimate of 1.866 TCF from this month's STEO. The Desk's survey of the end of October 2026 gas in storage rose by 43 BCF to 3.780 TCF. That compares to the EIA's estimate of 3.988 TCF from this month's STEO.  

This week's EIA gas storage data is seen as a draw of 150 to 154 BCF, as per early estimates. This compares to last year's draw of 182 BCF and the 5 year average draw of 159 BCF.

A colleague pointed put how there are a whole host of open March put options positions. Are these going to act as a magnet for the spot futures in the near term? The NG/LN options expire next Tuesday February 24. The $3.00 strike had 59,774 options open as of Friday's close. The $2.75 puts had 48,027 contracts open. The $3.25 put strike had 27,354 options open.

Technically the NG futures have closed the gap to 3.114 that was created over the weekend. DC chart based momentum is neutral at an oversold level, while the March daily chart has momentum that is near oversold and near turning positive. NG futures have tested resistance at 3.164-3.167 this morning with a high of 3.171. The next best resistance comes in at 3.246-3.249. Support is likely at 3.018-3.020. The low from Sunday evening is 2.968.

The EIA's weekly gas storage report will be released at its normal hour on Thursday at 10:30 AM (EST).

Enjoyed this article?

Subscribe to never miss an issue. Liquidity’s Daily Energy Market Updates provide a comprehensive analysis of both the fundamentals and technical factors driving energy markets.

Click below to view our other newsletters on our website:

Ethanol Update 

Natural Gas Update

Fuel and Freight Daily Report

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