Daily Energy Market Update February 6,2026

Liquidity’s Daily Market Overview

Crude oil prices are lower while RB spot futures are higher as the market continues its sideways pattern seen this week with many citing a lack of headlines today as the market awaits news from the US/Iran talks. News wires tout the fact that the crude oils are on track for ending the week lower versus one week ago.

The weekly price drop in crude oil would be first since mid-December as  some of the geopolitical premium has been reduced as the US and Iran engage in talks.

The dollar is headed for its strongest week since November. Risk aversion heightened by selloffs in tech stocks and precious metals has helped the dollar. (CNBC)

Saudi Arabia lowered their flagship A-Light crude grade to Asia for March loadings by 30 cents, which was less than the Reuters survey expectation for a cut of 50 to 85 cents; but the drop in the OSP to Asia was the 4th straight month of cuts and left the OSP at a near 5 year low. The smaller than expected cut is possibly due to some better demand from Asian customers who are losing access to discounted Russian crude. Prices for Saudi crude to the Med and NW Europe were lowered by 30 cents across the board. Prices to the US were lowered by 10 to 30 cents. 

Energy Market Technicals

Technically momentum is negative for the energies. But, the pattern of this past week has more of a sideways look to the crude oils and distillate charts.

WTI spot futures see support at 62.05-62.07 and then at 61.12-61.14. There is currently a double top from yesterday/today at 64.58-64.67. Above that  resistance is seen at 65.53.

Natural Gas Market Overview

Natural Gas --NG is up 6.3 cents at $3.572
NG is continuing its stepladder up move seen since bottoming Monday. The latest GFS 6z 15day forecast is over 14 HDD higher nationally driven by the back end of the two-week weather outlook. (Market News) Yesterday's EIA data initially was seen as disappointing as it was less than forecasted. But, continued cold temperatures are seen leading to a further "outsized draw" in next week's EIA data.

The EIA storage data seen Thursday disappointed with a draw of 360 BCF, which was 14 BCF less than the Reuters and WSJ surveys. Total storage fell to 2.463 TCF. That is still +41 BCF/+1.69% versus last year's level. But, the storage level now versus the 5 year average flipped to a deficit of 27 BCF ( -1.08%). And next week's number is likely to further widen the deficit to the 5 year average and flip this year's surplus to a deficit versus last year's inventories. Post Thursday's EIA data release the NG futures sold off as much as 19 cents only to rally midday as weather forecasts still show below normal temperatures versus the 10 year normal level.

Today starts the index funds' double roll in which they are expected to sell the front month (March) and roll that length into the 3rd month (May).

Notable options trades on the CME from Thursday included the November $2.75/$2.00 one by 2 put spread that traded 5.9 cents cost. This was an initiating trade in both strikes as per CME open interest. 3,750 contracts of the May $2.25/$2.00 put spread traded 2.1 cents with .03 delta May futures buys at $3.27. A total of 3,000 contracts of the March April plus 25 cent call traded 12.7 and 12.8 cents that closed the position. Additionally in the March April CSO, 5,000 lots of the flat put/plus 10 cent put spread traded at a cost of 6.2 cents. The 10 cent put position was initiated, while the flat put position was being closed, as per CME open interest data.

While momentum basis the March daily NG chart remains negative, the current spot futures price is well off of Monday's low. Resistance at 3.655-3.661 was tested overnight with a high of 3.659. Above that resistance is seen at the bottom of the gap created last weekend at 3.736-3.739. Support lies at 3.410-3.416 and then at 3.328. 

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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