Daily Energy Market Update February 2,2026

Liquidity’s Daily Market Overview

Energies are lower weighed down by several factors. Notable for crude oil is the news that the US and Iran are set to begin talks in a few days, lowering the geopolitical factor in the region. Also weighing on energies is the warmer forecast, which is seeing ULSD down the most in the energy sector. And a sharp further selloff in metals is seen hurting crude/commodity prices.  

President Donald Trump said over the weekend Iran was "seriously ​talking" with Washington, signaling de-escalation with an OPEC member after risks of ‌a military strike drove prices to multi-month highs. Iranian news agencies say that talks are likely in the coming days. Tehran's top security official said on X that arrangements for negotiations were underway.  (Reuters)

The dollar strengthened again Monday, advancing the most against currencies sensitive to commodity prices, as a plunge in gold and silver rippled across markets, as per Bloomberg reporting. Silver sank as much as 16% Monday after its intraday loss on Friday was the steepest on record. Gold was down as much as 10%, while copper fell as much as 5% in Monday's activity. (Bloomberg) The metals selloff today follows Friday's drop in silver prices of 25% and gold's drop of  as much as 11%. The metals selloffs are being attributed largely to President Trump's appointment of a new Fed chairman, who is seen as historically hawkish for interest rate policy. (Yahoo Finance)

Reuters reporting has Venezuelan oil exports in January rising to 800 MBPD from 498 MBPD in December. Increases were seen in exports by Chevron and by trading houses.

OPEC + agreed in principle to keep their planned pause in oil output hikes in place in March. (Reuters)
 
The Baker Hughes oil rig count seen Friday was unchanged.

CFTC data from Friday's COT report showed money managers added net length in WTI, Brent  and RB, while flipping their net short position in ULSD to a net long one in the week ended Tuesday Jan 27. WTI net length on ICE/CME rose by 9,586 contracts. ING says that the money managers' WTI net length was the highest since August of last year.  Money managers increased net longs in ICE Brent by 29,947 lots last week, which is the largest bullish stance since September 2025, as per ING reporting. RB net length rose by 3,285 contracts. ULSD positioning saw money managers end the period with net length of 10,612 contracts. 

China’s factory activity gathered speed in January, according to a private survey released Monday, as manufacturers accelerated production and front-loaded shipments ahead of the extended Lunar New Year holiday. The seasonally-adjusted RatingDog China General Manufacturing PMI, compiled by S&P Global, rose to 50.3 in January from 50.1 the previous month, in line with analysts’ expectations of 50.3 in a Reuters poll. January's pace was the best seen since last October. Total new orders expanded for the eighth straight month while new export orders rebounded, primarily buoyed by increased demand from overseas buyers, particularly Southeast Asia. The official Chinese PMI survey also issued over the weekend came in weaker. The January reading was 49.3 down from December's level of 50.1.  National Bureau of Statistics officials attributed the slump to a seasonal slowdown and softer global demand. Local media reported that some factories halted production last month to allow their workers to return home ahead of the upcoming Lunar New Year.  (CNBC)

Japan's manufacturing activity grew at the fastest pace in about three and a half years in January, a ​private-sector survey showed, as strong customer demand drove an increase ‌in output and new orders. The headline improvement in the PMI ‍was driven by gains in output, which expanded at the strongest pace since April 2022. Notably, new export orders expanded for the first time since February 2022, buoyed by strong demand from key markets such as the U.S. and Taiwan.  (Reuters)

The Reuters monthly survey of 31 economists and analysts seen Friday raised their 2026 oil price forecasts from those seen last month. Brent oil is seen averaging $62.02, which was an increase of 75 cents from their December forecast. The WTI forecast was raised by 57 cents to $58.72.

Energy Market Technicals

The sharp selloff in the energies has seen DC chart based momentum turn negative.

WTI spot futures see support at 61.40-61.45 and then at 60.32-60.40. Resistance lies at 63.34-63.39 and then at 64.08-64.15. The overnight high from the opening of the session is above that at 64.74.

Natural Gas Market Overview

Natural Gas--NG is down 81.2 cents at $3.542
NG spot futures have gapped lower over the weekend as the back end of the weather forecasts gave up a lot of heating demand.

Over the weekend, the near-term temperature outlook moderated, especially for the Feb 11-15 period, which now look to experience below-average Gas-Weighted Degree Days (GWDDs), as per Celsius Energy analysis. Over the weekend, the American model was seen having lost 23 HDD's , while the European model lost 30 HDD's. The current forecast shows high demand for natural gas for days 1 thru 6, moderate demand for days 7 and 8 and then low demand for days 9 thru 15. (NatGasWeather) NOAA forecasts February to be warmer than normal for most of the country.

Money managers covered a lot of their net short positioning in NG futures/options on the CME in the week ended last Tuesday Jan. 27. Money managers covered 55,044 contracts of their net shorts, dropping their net short total to 21,970 contracts. 73,706 contracts of short positions in futures/options were covered.

TTF European gas futures have dropped by over 13% today, mirroring the broad selloff in the other energies. The spot March TTF futures have gapped lower today. The gap goes from Euro  37.000 to 37.350. The spot TTF futures were printing Euro 34.460 at 8:45 AM (EST). European gas futures have sold off also as a result of weather forecasts having turned milder in Europe as well as in the US, easing supply concerns. But, European gas storage dropped to 44% of total capacity on January 26, according to European energy data platform AGSI. That is the lowest level for this time of the year since 2022, when it hit 40% as the market scrambled to replace Russian supplies, and it is well below the 10-year average of 58%. And if current trends persist, storage could plunge to 30% or lower by the end of March, based on Reuters analysis of historic data. If Europe ends winter with storage only 30% full, about 60 billion cubic metres  (=2.119 TCF) of gas will need to be injected to return stocks to 83% - the level at which the region entered last winter.

The recovery in China’s imports of LNG is expected to extend for another month in January, Kpler has reported, for a total of three consecutive months of higher LNG imports year-on-year. The analytics provider estimates that China will import 6.94 million tons of LNG (= 338 BCF) this month, as quoted by Bloomberg, which added the amount would represent a respectable 15% increase on January 2025. According to the report, the import increase may suggest more cargoes getting delivered to China under long-term contracts. Earlier in 2025,  LNG imports into China saw year on year declines, as China raised its domestic production and shied away from imports due to President Trump's tariffs. Between November 2024 and October 2025, China recorded 12 straight months of LNG import declines. (Oil Price)

The Baker Hughes gas rig count issued Friday showed an increase of 3 units.

In the LN/NG put options Friday, very large positions were initiated as per CME open interest data. 7,500 contracts of the April $3.50 puts were bought against selling of 10.000 contracts of the April $3.00 puts ( thus in a 1 by 1.5 lot ratio) at a cost of 12.5 cents. In the May put options, 7,500 contracts of the $2.75/$2.50 put spread traded 2.9 cents. In the October options, the $3.25/$2.50 put spread traded 13.1 and 13.3 cents; in total 5,000 contracts traded.

Also seen on the CME block board was a trade of 18,000 contracts of the May October spread trading minus 40.3 cents; the May October spread settled Friday at minus 37.6 cents and today is printing 10.9 cents lower at minus 48.5 cents.

The $3.736 high for the NG futures session today was seen on the opening last night. The gap from the weekend goes up to 3.818. Momentum has turned negative in the sharp selloff. Support at 3.543-3.550 has been pierced today with a current low of 3.537. Next support is then at 3.510-3.515 and then at 3.434-3.437. Resistance comes in at 3.761-3.768. 

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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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