Daily Energy Market Update January 5,2026

Liquidity’s Daily Market Overview

Crude oil prices are higher now after starting the session lower last night. The continued US embargo on Venezuelan oil and operational issues there are seen limiting production and exports, thus supporting prices.  

The US, over the weekend, captured Venezuelan President Maduro in an attack in Venezuela. The US has vowed to take over the Venezuelan oil industry. But, many details remain murky as to how matters will proceed in the country with regard to who will lead the country and how the oil industry will move going forward. Some believe that the US will seek to invest billions of dollars to revive the industry and gain access to the abundant oil reserves that Venezuela possesses. Yet, that process will take many years of development. Trump said on Saturday that the oil embargo on Venezuelan exports remained in full effect. (Reuters) There is unlikely to be a significant increase in Venezuelan oil exports until sanctions are eased, as per WSJ commentary.

Reuters quotes sources as saying that no damage was inflicted on Venezuela's oil production and ‌refining industry. But, the US seizure of tankers in Venezuela in December has led to less exports and has seen production drop as storage tanks there have become full. The OPEC member's exports fell to around 0.5 MMBPD in December, around half of what they were in November. Most of the December exports took place before the embargo. Since then, only exports from Chevron of around 100,000 bpd have continued to leave Venezuela.  Kpler reports that Venezuela's oil output is expected to fall in the short term, potentially dropping to 600-700 MBPD by February from the current output rate of around 800 MBPD. The fall in output is due to a surplus of unsold oil and limited storage, forcing slower production as sanctions persist and affecting heavy crude supply for refineries. Operational issues, including fires at key heavy crude upgraders, further limit the processing of heavy crude, reducing overall supply. Output averaged about 1.1 MMBPD last year. (Reuters)

Oil tankers have left Venezuela without authorizations from PDVSA according to NY Times reports and TankerTrackers analysis. TankerTracker.com says that about a dozen loaded oil tankers left Venezuela breaking the US blockade. (Reuters) US intervention in Venezuela will likely choke oil flows to China, though the short-term impact will be softened by large volumes of sanctioned crude stored at sea, Bloomberg reports. Venezuelan shipments made up only 4% of oil imports to China last year.  The oil is deeply discounted making it popular with China’s teapot refiners.  Almost 82 MMBBL are currently on tankers in waters off China and Malaysia, according to Kpler. More than a quarter is Venezuelan and the rest is Iranian.

OPEC+, over the weekend, voted at its meeting to leave its oil production policy unchanged. "OPEC+ is clearly prioritizing stability over action.”, as per a Rystad analyst's comment. Sunday's brief online meeting affirmed their prior decision to  pause output hikes for January, February and March due to relatively low demand in the northern hemisphere winter. The eight countries will next meet on February 1, OPEC+ said.  (Reuters)

Middle East crude oil benchmark Dubai slipped into a discount against swaps on Friday for the first time since December 2023, according to Reuters.

Retail gasoline and diesel prices in the US have fallen further with the gasoline price, as per AAA data, sinking to $2.812. One month ago the price was $2.978 and one year ago it was $3.061. The diesel price today is $3.521, down from the price one month ago of $3.717.

CME open interest data from Friday's trading in CL futures shows an increase of 33,039 contracts, which looks to us to be more so new shorts in the February through May contracts. RB open interest rose by 11,074 contracts, which we see as more so new shorts in the March through June contracts.

Energy Market Technicals

Momentum for the CL and HO are positive basis the DC chart, while that for RB is trying to turn positive. 

WTI spot futures have support at 56.60-56.65, which was tested with the overnight low of 56.31. Below that support lies at 55.82-55.88. Resistance comes in at 58.88-58.94 and then at 59.41-59.42.

Natural Gas Market Overview

Natural Gas--NG is down 19.6 cents at $3.422
NG prices have gapped lower over the weekend as weather demand remains low to very low for the next 12 days.

Natural gas demand basis the weather is seen as low to very low for days 1 through 12 and then moderate for days 13 to 15, as per NatGasWeather. Weather models for the coming 14 days were said to be little changed over the weekend. Average Lower 48 temperatures are forecast to edge further above normal in the coming days before a steady decline from the weekend and back near normal around mid-month. (NOAA) Meteorologists forecast warmer than normal temperatures nationwide through January 16, with heating degree days (HDD) falling from 413 on Wednesday to 369 on Friday. (baird maritime)

US domestic natural gas production is estimated today at 110.5 BCF/d compared to the 30-day average of 113.1 BCF/d, according to BNEF.

Technically the NG has negative momentum basis the DC chart. The gap from the weekend goes from 3.508 to Friday's low of 3.563. The prior DC chart gap to 3.405 left from the November futures expiration was filled overnight. Below that light support comes in at 3.355-3.357. Resistance comes in at the overnight high at 3.507-3.508 and then at Friday's low at
3.563-3.572.

Enjoyed this article?

Subscribe to never miss an issue. Liquidity’s Daily Energy Market Updates provide a comprehensive analysis of both the fundamentals and technical factors driving energy markets.

Click below to view our other newsletters on our website:

Ethanol Update 

Natural Gas Update

Fuel and Freight Daily Report

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