Daily Energy Market Update February 23,2026

Liquidity’s Daily Market Overview

Energies are higher now after trading lower overnight as the US & Iran are set to resume talks this week. The rebound is likely due to a weaker US dollar as a result of the Supreme Court ruling Friday striking down President Trump's tariffs and his announcement since that he will levy new ones. Also continued concern over geopolitical tension is likely supporting prices again today. 

Bloomberg reported Sunday that talks between the US & Iran are set to resume this Thursday (Feb. 26) in Geneva.  Iran’s window to reach a diplomatic agreement over its atomic activities is at risk of closing, according to the head of the United Nations nuclear watchdog. (Reuters) US Special Envoy Witkoff told Fox News on Saturday that “zero enrichment” would be a non-negotiable term for a deal, contradicting a semi-official Iranian Students’ News Agency report that the US has accepted Iran’s red line of continuing to enrich uranium.  “First of all, enrichment is our right,” Iran's Foreign Minister said Sunday. He told CBS on Sunday he saw a “good chance” of a diplomatic solution to the standoff over his country’s nuclear program, while reiterating Tehran won’t be pressured by the US military buildup. (Bloomberg)

Separately, the Financial Times reported on Sunday that Iran agreed to a €500 million deal to acquire thousands of advanced shoulder-fired missiles from Russia over the course of three years. (Bloomberg)

Some analysts believe that the current geopolitical premium is too small, given what could happen to oil flows in the Mideast. One Reuters analyst, in particular, speaks of the "what if" Iran were to unleash attacks against other Gulf region oil infrastructure; the analyst adds that the market is not really foreseeing a disruption to flows through the Straits of Hormuz. He adds that the market's consensus range for the risk premium is around $7 to $10 a barrel. BNEF puts the premium at $4. BNEF postulates that markets are likely pricing in potential tanker seizure or disruption to Iranian energy infrastructure. Bloomberg writes :" Oil time spreads are reacting to the increased risk. Brent’s one-year spread moved to the widest backwardation — a market structure that signals tighter near-term supply — since June." The April 2026 April 2027 Brent time spread is worth about $5.41. At the beginning of January, the spread was trading near flat.

The energy markets have been roiled --as have the equity and gold markets -by the uncertainty caused by renewed trade-war fears with the Supreme Court's ruling Friday striking down President Trump's tariffs. Trump said on Saturday that he would raise a temporary tariff from 10% to 15% on U.S. imports from all countries, the maximum allowed under the law, after the U.S. Supreme Court ruling. (Reuters)

Friday's CFTC report of money managers positions showed a very small change in the WTI futures/options position on ICE/CME combined with net length falling by 2,904 contracts. RB net length fell by 2,014 contracts, while money managers reduced their net length in ULSD by 7,724 contracts to 12,592 contracts. The CFTC report was for the week ended Tuesday Feb 17. Brent net length fell by 17,876 as longs liquidated. (ING)

CME open interest data from Friday's trading shows ULSD futures open interest fell by 11,127 contracts, which we see as long liquidation in the March and April contracts.

The Baker Hughes oil rig count was unchanged in Friday's report.

The U.S. retail diesel price at the pump has risen further today to a fresh high since December 5th. Today's price is $3.712. One month ago the price was $3.554 as per AAA data.

Energy Market Technicals

The lows of the session for WTI, RB & ULSD were seen on the Sunday evening opening. The mean reversion setups from Thursday's closes above the upper daily chart bollinger bands were confirmed for RB and CL with Friday's settlements back below the upper bollinger bands. This suggests that some profit taking would be seen as was the case Friday afternoon into last night. Momentum remains positive for the energies.

Spot WTI futures see support at 65.00-65.03 and then at 64.14-64.15. Resistance comes in at 67.05. The DC chart's upper bollinger band lies near there at 67.08. Above that resistance comes in at 67.74-67.76 and then at 68.91-68.96.

Natural Gas Market Overview

Natural Gas--April NG is up 3.3 cents at $3.017
NG futures are higher as, over the weekend, European weather models added quite a bit of demand to the 7 to 14 day forecast, although a portion of that increase was given back in the latest European model's run from earlier today, thus making for a much smaller rise in NG prices today.

Over the weekend, the European and GFS weather models differed greatly as to the forecasts for HDD's in the coming 7-14 day period. The GFS has trended milder for the 7-14 day period while the ECWMF has pivoted colder with multiple waves of arctic air east of the Rockies. (Celsius Energy) NatGasWeather showed the European model adding 30 HDDs to the forecast versus Friday, while the GFS model reduced its totals by 15 HDDs. Since that forecast, the European model gave back 21 HDD. Increased wind generation may also reduce some demand near term, with Celsius Energy putting today's displacement of natural gas demand at 0.7 BCF/d versus yesterday.

CFTC data seen Friday showed money managers added to their net short position in futures/options. Net shorts rose by 18,712 contracts to a total of 26,840 contracts. This was achieved through new short positions added in the week ended Tuesday Feb. 17.

Gas storage inventories in Germany are at their lowest level since 2011, as per GIE data. European storage as of February 18 stood at 31.97% versus the 5 year average of 48.6%. (Reuters/Market News)

The Baker Hughes gas rig count was unchanged in Friday's report.

The March LN/NG options expire tomorrow Tuesday 2/24. As of Friday's close, the following options' open interest data from the CME showed the March $2.75 put with 41,704 contracts open, the $3.00 put with 54,252 contracts open, the $3.25 puts with 26,672 contracts open and the $3.50 puts with 25,269 contracts open. In the March  calls, the $3.00 strike has 16,880 contracts open, the $3.25 call with 17,990 contracts open and the $3.50 calls with 30,626 contracts open. Notable in trading of the expiring LN/NG March options were the $3.00 puts. They traded 5,000 contracts worth early in the day at 10.5 cents cost with the March futures worth about $2.97. At midday, with March futures having risen to near $3.14, the March $3.00 put traded 2,000 contracts worth at 4.8 cents.

In Friday's activity on the CME, the March April CSO flat puts traded actively at 1.7 and 1.6 cents. The open interest in the option fell by 7,400 contracts. In the October January CSO,  positions were opened in the -$1.50 and -$2.00 put strikes. A trade was executed in a 1 by 2 ratio, as the -$1.50 put was purchased against selling of 2 of the -$2.00 puts for a net cost of 2.3 cents. 

Technically, the April NG has positive momentum rising from an oversold condition. The high of the session today of 3.150 was seen on the opening last night as prices gapped up to begin with. Support for the April futures is seen at 2.910-2.911, which is the double bottom from Thursday/Friday of last week. Resistance lies at 3.201-3.206.

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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.

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