Daily Energy Market Update January 27,2026

Liquidity’s Daily Market Overview

Energy prices are higher, although ULSD is lagging some as it saw some profit taking overnight, as is being seen in the NG futures. News wire reports are focused on the support that the US weather conditions are giving as US oil production has been affected--versus the resumption of some of the production lost in Kazakhstan last week providing some headwind. Continued fighting in Ukraine and statements by the current leader in Venezuela are supporting prices as is a weaker dollar.

U.S. oil producers lost up to 2 MMBPD ‌or roughly 15% of national production over the weekend, analysts and traders estimated. Oil production outages peaked on Saturday at 2 MMBPD, consultancy Energy Aspects estimated, with the Permian Basin likely to have experienced the largest share of that decline at around 1.5 MMBPD. Production losses eased on Monday, with Permian shut-ins estimated at about 700 MBPD and production set to be fully restored by January 30. (Reuters)

Kazakhstan’s oil output is set to recover, with Tengizchevroil restoring power to its Tengiz field. Operations at the Tengiz and Korolev fields, which produced around 890 MBPD over the first three quarters of 2025, were halted last week due to power issues. Meanwhile, the completion of repair work at the CPC terminal should also support a recovery in export flows. (ING)

The Bloomberg Dollar Spot Index fell as much as 0.4% to the lowest since March 2022. That extends declines for a fourth straight day and comes after the greenback’s worst week since May. Longer-term, risks around Federal Reserve independence, a growing budget deficit, worries about fiscal profligacy and widening political polarization have all dragged the dollar lower.  (Bloomberg)

Venezuela’s acting president Delcy Rodríguez said Sunday she has had “enough” of Washington’s orders, as she works to unite the country after the US capture of its former leader Nicolás Maduro. On Monday, she said at a public event that Venezuela does not fear the U.S., but she stopped short of antagonizing the U.S. (CNN)  Some have dismissed the comments from Ms. Rodriguez as designed to curry favor within Venezuela.

Russian missiles and drones hammered two Ukrainian cities overnight, officials said on Tuesday, killing at least two and wounding 23 in the Black Sea hub of Odesa and knocking out power in much of Kharkiv, Ukraine’s second-largest city. Every such Russian strike erodes the diplomacy that is still ongoing and undermines the efforts of partners who are helping to end this war," Ukraine President Zelenskiy wrote on X. Russian and Ukrainian officials are expected to hold another round of U.S.-brokered talks on Sunday after meeting last weekend in Abu Dhabi.  (Reuters)

Energy Market Technicals

Momentum is trying to stay positive for the energies. The products' momentums looked poised to turn negative as prices fell to their overnight lows.

WTI resistance at 61.50 has been pierced. Next resistance is seen at 62.36 and then at 62.87-62.92. Support lies at 59.94-59.99 and then at 59.47-59.52.

Natural Gas Market Overview

Natural Gas--March NG is down 11.6 cents at 3.782
NG futures are easing back after Monday's strong rally. Reasons cited for today's pullback are profit taking and the prospect that the current outage in production will ease by next weekend, as per Rsytad Energy commentary. Market News commentary adds that early February weather forecasts have dialed back some of the cold. 

Natural gas supply outages have emerged across the U.S. in the wake of winter storm Fern, with an initial loss of 2 BCF/day from the Bakken, Rockies and Mid-Continent, followed by a more abrupt drop of 12 BCF/day, primarily driven by the Permian and broader Gulf Coast region," a Rystad Energy analyst in a note. "We expect significant outages to persist throughout the first half of the week followed by a swift recovery Sunday." (Seeking Alpha) Lower 48 states dry gas production is estimated 1.37 BCF/d higher today at 96.49 BCF/d, but is still well below the average of 113.3 BCF/d in the first half of January, BNEF data shows.  Average gas output in the Lower 48 U.S. states dropped to 106.9 BCF/d so far in January, down from a monthly record high of 109.7 BCF/d in December, according to LSEG, as producers shut in production.

Regulatory filings with Texas authorities showed 2 dozen reports of upsets at natural gas processing plants and compressor stations in Texas. But this was much lower than the more than 200 reported upsets during the first five days of a severe winter storm in 2021, TAC energy analysts said in a note on Monday. (Reuters)
Market News data shows LNG terminal feedgas demand is rebounding today by 2.18 BCF/d to 12.58 BCF/d. Flows averaged around 18.5 BCF/d last week prior to the cold, Market News adds.

Average U.S. lower 48 states temperatures are forecast well below normal until the end of the month with a gradual warming in early Feb although remaining below normal. The NOAA 8-14 day chart shows an easing of the cold in the east but still with temperatures expected below normal. 

US dry gas consumption is estimated 6.16 BCF/d lower today at 134.98 BCF/d after rising to a record high the prior day, Bloomberg shows. The seasonal five-year average is around 101 BCF/d.

February NG futures settled up 28.9% Monday after rising 70% last week. The March NG futures settled up 8.00% Monday, while April was up 4.46%. Monday's high in the spot February contracts was $7.439. The contract settled at $6.800.

Today is the last trading day for the February NG / LN options.

In the options on the CME on Monday, the March call open interest rose by 25,279 contracts with notable increases in the $5.00 and $6.00 call strikes. One trade seen had the March $6.00 call sold against buying of the $4.00 call at a cost of 27.5 cents with 0.3 delta March futures sales at $3.89.  A notable trade seen in the CSO's was 6,000 contracts of the October January CSO minus 75 cent call were sold against buying of the minus $1.50 put at a cost of 5.2 and 5.3 cents. Earlier in the day when the underlying futures spread was about 6 cents narrower, 1,000 contracts of the minus 75 cent call versus the minus $1.50 put traded 1.5 cents. The delta of the option (0.5 delta) was high versus the underlying futures spread--hence the option price moving quite a bit with the weakness in the spread. The minus 75 cent call portion of the October January CSO trade was an opening trade, as per CME open interest data. In a further opening trade in the October January CSO, 4,500 contracts of the minus $2.00 puts went between 2.5 and 2.8 cents cost.

Technically, March NG futures are having an inside day with a double bottom currently at 3.651/3.658 from yesterday/today. Below that support lies at 3.581-3.585 and then at 3.510-3.515. Resistance is seen at 3.89 and then at the 3.985 area. Momentum basis the March daily chart is getting near overbought.

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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