Daily Energy Market Update January 26,2026

Liquidity’s Daily Market Overview

Energy prices are mixed with ULSD higher, but crude oil and RB are lower.  The RB is being negatively impacted by the storm seen over the weekend and the impending continued cold weather, which is seen hampering travel. ULSD is being boosted by the very cold weather impacting the US, which is seeing demand elevated for heating fuels. Crude oil has traded either side of unchanged overnight, boosted by concerns over Iran and a loss of some US crude production, while being negatively impacted by demand concerns due to deteriorating US relations with some of its allies and a return of some lost Kazakh oil production.

About 250 MBPD of crude production has been lost in the U.S. due to harsh weather, including declines in the Bakken field in Oklahoma and parts of Texas, JPMorgan analysts said in a note on Monday. (Reuters)

The storm's impact is reflected in the differing RB and HO versus WTI crack spreads. The March RB/CL crack is down a little more than 75 cents, trading near $16.70. But, as to be expected as is being seen in the strength in the NG futures, HO futures are up versus WTI. The March HO/CL crack is up nearly $1.10, trading near $38.30. The March HO/CL crack traded over $39 overnight.

As per a Jerusalem Post headline: " US may impose blockade on Iran rather than a 'kinetic attack,' expert says." This comes on the heels of President Trump's comments of an "armada" heading to Iran, but he said that he hoped he would not have to use it. On Friday, a senior Iranian official said Iran would treat any attack "as an all-out war against us." (Reuters)

Kazakhstan's Caspian Pipeline Consortium said it returned to full loading capacity at its terminal on the Black Sea coast on Sunday after completing maintenance at one of its three mooring points. And Tengizchevroil, which operates Kazakhstan's giant Tengiz oilfield, has begun a gradual resumption of production after an extended outage, it said on Monday. (Reuters)

News wire reports are saying that OPEC+ is likely to keep its production level unchanged for March when they meet next Sunday, February 1.

There has been much talk lately about foreign investors backing away from the U.S. Treasury market, with President Donald Trump recently threatening to retaliate against nations that sell. Treasury yields rose sharply last week as a bond-market selloff in Japan spilled over into global markets before easing up. The administration’s threats over Greenland reignited fears of the “Sell America” trade.  (MarketWatch.com)

The Baker Hughes oil rig count seen Friday showed an increase of 1 unit.

The national average retail diesel price in the US, as per AAA data seen today, has risen to $3.574, up from $3.497 one month ago.

Energy Market Technicals

Technically the energies have positive momentum.

WTI spot futures have resistance at 61.50 and thn at 62.36. The overnight high is 61.71. Support lies at 59.47-59.52.

Natural Gas Market Overview

Natural Gas--March NG is up 13.0 cents at $3.739
NG futures have gapped higher over the weekend as the cold in the US is set to linger across much of the country through at least the next 5 days. The cold has already an impact with demand soaring and freeze-offs reducing production.

Almost 10% of US natural gas production is estimated to be offline due to the cold, as per Bloomberg reporting. US natural gas production has plunged by about 10 BCF/d in recent days as frigid weather has frozen pipelines, choking off supply, even as demand for the heating fuel has surged about 18 BCF/d, according to BNEF data. The storm could cut 86 BCF of natural gas production over the next two weeks, Energy Aspects said, noting that the Appalachia region could lose 35 BCF of output.  Energy Aspects forecast for a loss of up to 86 BCF issued Friday, was up from their Thursday forecast for a loss of 63.7 BCF on Thursday. (Bloomberg/Reuters)

But, also lower is the feedgas volume for LNG plants. 2 separate sources put the loss of feedgas volume at 4.0 BCF/d Sunday from Friday's amount. (Bluegold Trader/Celsius Energy)

PJM, the largest US power grid, warned that, depending on temperatures, it could set a new all-time winter peak load on Tuesday, January 27. (Reuters) PJM’s region has the highest concentration of data centers in the US and is the focus of concern over how electricity generation can keep pace with the AI-driven demand boom. (Bloomberg)

The LN/NG options for February expire tomorrow Tuesday and the NG futures expire on Wednesday. The open interest figures from the CME for nearby option strikes in the February LN/NG options as of Friday's close is as follows: The $6.00 call has 35,170 contracts open. The $5.50 call open interest is 16,384 contracts. The $6.50 call open interest is 10,515 contracts. On the put side, the $5.00 put is the strike with the most open interest among the nearby options; the open interest is 15,203 contracts.

CFTC data issued Friday showed money managers reduced their net shot positioning in NG futures/options on the CME by 27,035 contracts in the week ended Tuesday Jan. 20. Their total net short position then stood at 77,014 contracts. But, we figure that that total fell more in the 2nd half of the week. ING commentary suggests that the net short position "has been completely erased"  in the latter part of the week last week, "given the price action".  Unfortunately that data will not be available until Friday, when the CFTC will show money managers' positioning as of Jan. 27. 

European TTF spot futures prices rose today to their best value since March 21,2025 on the back of the US NG strength and the drop in LNG feedgas volumes seen the past few days in the US, as well as the support from the low storage level of gas in Europe. The EU sourced 27% of its total gas and LNG imports from the US in 2025, up from 6% in 2021, increasing exposure to US supply disruptions. Gas storage is being drawn down rapidly, with EU inventories at 45.6% compared with 56.5% a year ago, including low levels in Germany (37.5%), France (36.4%), and the Netherlands (31.1%).  The 5 year average for storage seasonally is 61%, as per ING reporting.  (trading economics.com)

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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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