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- Daily Energy Market Update February 5,2026
WTI is down $1.80 at $63.34 RB is down 3.16 cents at $1.9336 ULSD is down 8.68 cents at $2.3832
Liquidity’s Daily Market Overview
Energies are lower as talks between the US and Iran are set for tomorrow, after some doubt yesterday that they would proceed. Also weighing on energy prices today is a stronger US dollar and a selloff in metals, especially silver. The ULSD contract is likely being hurt by the closing of the arb to NW Europe, thus crimping demand for export.
Iran US talks news dominated Wednesday's trading and caused some rapid moves both to the upside and downside. The U.S. and Iran have agreed to hold talks in Oman on Friday. Oil prices rose Wednesday following reports that talks set to be held Friday might not happen because of disagreement over venue and subjects to be included. The U.S. Secretary of State said Wednesday: "While Iran wants only to discuss its nuclear program, the U.S. seeks a wider range of subjects including the nuclear program, Iran's ballistic missiles and sponsorship of militia groups in the region." Iran has pushed to restrict the negotiations to discussing its long-running nuclear dispute with Western countries. A senior Iranian official said, however, that Iran's missile program was "off the table." President Trump has warned that "bad things" would probably happen if a deal could not be reached. (Reuters/WSJ)
Strength in the U.S. dollar and volatility in precious metals also weighed on commodities and risk sentiment more broadly on Thursday, analysts said. Spot silver plunged as much as 17% toward $73 an ounce during the Asian trading session, before paring losses to about 11% mid-morning in Europe. Copper and gold sold off some in tandem with the silver. The US Dollar Index strengthened today on hawkish Fed signals and expectations of a slower pace of rate cuts. (Reuters/Bloomberg/FX Street)
The DOE data seen Wednesday showed a crude oil inventory draw of 3.455 MMBBL. But, to us, the 3.455 MMBBL crude oil draw is largely due to the EIA's accounting adjustment for the week in which they reduced supply by 1.040 MMBPD --equal to -7.280 MMBBL, thus offsetting the large increase in net crude oil imports of 1.101 MMBPD ( equals +7.707 MMBBL of supply) in this week's data. Distillate demand rose on the week by 241 MBPD to a healthy total 4.310 MMBPD--although this lagged last year's demand by 289 MBPD but beat 2024 demand by 493 MBPD. Gasoline demand fell by 604 MBPD to 8.153 MMBPD --lagging the prior 2 years demand by 175 and 654 MBPD. Notable within the DOE data, for us, are the increase in distillate exports of 538 MBPD to a strong total of 1.494 MMBPD and the decrease in the gasoline production by refiners of 565 MBPD to 9.009 MMBPD.
Discounts on Russian oil exports to China have widened to new records this week to attract demand from the world’s top crude importer and offset the likely loss of Indian sales, traders said. (Reuters)
The USGC ULSD arb to Europe is shut despite a weakening spread to Ice Gasoil as freight overwhelms fundamentals, according to Sparta Commodities. The February NYMEX ULSD to Ice Gasoil spread has fallen by more than 2 cents/gallon over the past week, though still sits at its highest seasonal level since 2023, Sparta Commodities said. The March CME Heating Oil/ULSD to ICE Gasoil spread is down almost 4 cents since last Friday. TC14 rates have surged by nearly $30/metric ton in the last seven days. TC14 refers to Baltic Exchange tanker freight rates for the US Gulf Coast to NW Europe route. (Market News/CME Group)
A report was seen yesterday which says that Pemex will reduce crude oil exports and increase its production of fuels, fertilizers and petrochemicals in 2026. In 2025, Pemex’s crude oil exports fell to an average of under 600 MBPD. In contrast, the company sent record volumes of 1.2 MMBPD of crude for processing at its Mexican refineries. Investments in the refineries of Tula and Salina Cruz will increase Pemex’s refining capacity, including the Deer Park refinery it owns in Texas, to more than 1.5 MMBPD. Crude oil production has "stabilized" at 1.8 MMBPD; thus, crude exports will fall to near 300 MBPD. (BN Americas)
The US national diesel average price has risen today to $3.638. One month ago the price was $3.521.
Energy Market Technicals
As much as the contracts have sold off quite a bit from yesterday's settlements, today's prices are seeing inside trading days versus yesterday's price ranges for RB and the crude oils. Momentum has turned neutral for the RB basis the DC chart, while it remains negative for the crude oils and distillates.
WTI spot futures see support at 62.86-62.89 and then at 62.03-62.07. Resistance lies at 65.34-65.40 and then at the double top from last week and from September 2025 at 66.42-66.48.
RB spot futures have resistance at 1.9770-1.9785 and then at 2.0051-2.0075. The DC chart's upper bollinger lies below those resistances at 1.9715-1.9720. Support comes in at 1.9228-1.9239 and then at 1.8966-1.8975.
ULSD March futures see support at 2.3482-2.3507. Resistance lies at the overnight high at 2.4535-2.4555 and then at 2.4848-2.4849.
Natural Gas Market Overview
Natural Gas--NG is up 6.3 cents at $3.528
NG is moving higher today, boosted by colder weather forecasts and the prospect for today's EIA gas storage data to show a record draw from inventories. As one analyst wrote yesterday: "Winter risk remains prominent over the next four weeks, with the possibility of a return to extreme cold still on the table through the end of the month. "
Overnight the latest weather run added some heating demand. That comes on top of the Commodity Weather Group having said Wednesday that very cold weather is expected in the U.S. Northeast through February 8, potentially boosting natural gas heating demand.
TTF prices are higher today, with commentary saying traders are worried about late season demand. Regarding European storage, Celsius Energy writes :"While the arctic air has been most localized across the far eastern portion of the continent, storage deficits versus the 5 year average have continued to widen & now stand at -600 BCF. Inventories are also closing in on 2022's 5 year low. This should continue to support robust domestic US LNG export demand well into the Summer." Additionally any rise in tension regarding Iran is seen underpinning the TTF contract. We suspect that the Iran tension being raised also supported NG futures some on Wednesday as concerns have been noted regarding LNG flows out of the Mideast--given that the UAE & Qatar are large exporters of gas. Their shipping lane is the Strait of Hormuz. TTF spot futures prices are well off the low of Euro 31.275 seen 2 days ago. There remains a gap to fill above from Euro 37.00 to 37.350. Today the spot TTF futures are printing near Euro 34.58.
The EIA gas storage data due out today is seen as a draw of 374 BCF as per WSJ & Reuters surveys. This would be a record draw, beating the record 359 BCF draw seen in January 2018. Last year saw a draw of 195 BCF, while the 5 year average draw is 190 BCF. This week's forecast draw would see the current surplus to the 5 year average flip to a deficit, with the prospect that next week's storage data will widen that deficit further and then also see the surplus to last year's storage inventories also flip to a deficit.
Yesterday, one source had US natural gas production being slow to return from the recent freeze-offs. Pipeline nominations—our best proxy for real-time output—have now declined for 4 straight days. Dry natural gas production is currently estimated at 105.9 BCF/d, down 4 BCF/d from the YTD high on January 12. (bluegold trader)
The March April CSO open interest figures showed some sharp changes on the CME from Wednesday's trading. The March April CSO flat put strike saw open interest rise by 12,150 contracts. The March April CSO plus 10 cent call open interest rose by 7,400 contracts. These 2 contracts were part of a trade that saw the flat put and the plus 25 cent call sold against buying of the plus 10 cent call at a cost of 1 cent. 11,000 contracts of that 3 option strike traded. The March April flat put traded 3.2 and 3.5 cents on its own as well. The March April $1.00 call saw open interest fall by 4,749 contracts. The option traded 3.5 and 3.7 cents. The October January minus 75 cent call open interest fell by 4,500; that many contracts traded 5.6 cents.
Technically momentum remains negative for the NG futures basis the DC and March daily charts, but the spot futures today are having their 3rd straight day of a higher low. Resistance is seen at 3.580-3.586 and then at 3.656. Support comes in at 3.376-3.386 and then at 3.264.
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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
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