Daily Energy Market Update January 6, 2026

Liquidity’s Daily Market Overview

Energies are mixed with the crude oil and RB up slightly but HO down over 1 cent at this time. Uncertainty over Venezuelan supply is continuing to support crude oil. ULSD is likely being hurt by the warm weather forecasts for January that are seeing NG prices fall, as well as the disappointing US manufacturing data seen yesterday, which suggests weaker demand for industrial fuel.

Comments seen from analysts re Venezuelan oil production read as follows: " "We estimate only 300,000 barrels per day of additional supply within the next two to three years on limited incremental spending.", as per Rystad analysis. Oil analysts said Venezuelan output could increase up to half a million barrels a day over the next two years with political stability and U.S. investment, as per Reuters commentary. ING writes: "  Developments over the weekend pose further downside risk to Venezuelan oil supply in the short term– and leave the potential for upside in the longer term. This would require significant investment in the domestic energy sector, which foreign companies may be reluctant to undertake unless there is a more attractive investment environment or some form of guarantee for investors."

Reliance Industries today said on it was not expecting any Russian crude oil deliveries in January, a move that could sharply cut India's Russian oil imports during the month to the lowest in years. The statement comes after Trump on Sunday that the U.S. could further raise import tariffs on India over its Russian oil purchases. (Reuters)

Saudi Aramco has set the February OSP for its flagship Arab Light crude oil to Asia at $0.30/bbl above the Oman/Dubai average, down from the previous month when the premium was $0.60/bbl. The OSP price drop of 30 cents is in keeping with a Reuters survey forecast. This is the third straight month of cuts. It leaves the OSP at its lowest level since January 2021. (ING)

The Reuters survey of 34 economists and analysts conducted in December forecast that Brent crude would average $61.27 per barrel in 2026, down from November's forecast of $62.23. U.S. crude is projected to average $58.15 per barrel, below November's estimate of $59.00. The poll was conducted in December 2025, prior to the U.S. military operation against Venezuela. Back in January, the survey called for Brent to average $72.62 and WTI to average $68.97 in 2026.

On Monday, data showed that U.S. manufacturing activity slumped to a 14-month low in December, with new orders contracting further and input costs grinding higher as the sector continued to bear the imprint of President Donald Trump's import tariffs. The ISM said its manufacturing PMI dropped to 47.9 in the final month of 2025, the lowest level since October 2024, from 48.2 in November. It was the 10th straight month that the PMI remained below the 50 threshold. Economists polled by Reuters had forecast the PMI would be little changed at 48.4.

Energy Market Technicals

HO is currently having an inside trading day versus yesterday's price ranges basis the spot futures, while the crude oils and RB are rising above yesterday's highs. DC chart based momentum for the energies is positive.

Spot WTI futures have almost tested resistance at 58.88-58.94 with a high of 58.87. Above this resistance lies at 59.64-59.67. Support comes in at 57.34-57.38 and then at 56.60-56.65.

Natural Gas Market Overview

Natural Gas-- NG is down 15.1 cents at $3.372
NG futures are back down after a late day rally Monday took the contract to the high for the day. NG is still being pressured by warm forecasts for most of January. Lower feedgas volume is likely also pressuring prices. As today's NGI headline reads:" January warmth lingers."

On Monday, the 14 day HDD forecast was seen at 369, up 2 from Friday's forecast, but still lagging the 30 year normal level of 458 HDD's. NOAA 6-10 day forecast shows above normal in northern and central areas but near normal on the Gulf Coast.

Yesterday's Henry Hub next day cash price fell below $3.00. In the early morning, the next day Henry Hub cash was trading at $2.790 versus NG February spot futures printing $3.395. This differential of 60 cents was much greater than the 15 cent differential seen mid-week last week. The large differential is an impediment to NG spot futures rallying significantly.

US LNG feedgas demand is down overnight, as Corpus Christi begins maintenance on Corpus Christi Pipeline. Market News estimates US feedgas of 17.8 BCF/d today, down 0.9 BCF/d from yesterday’s levels. The maintenance though is only seen lasting one day.

Early estimates for this week's EIA gas storage data are calling for a draw of 114 to 124 BCF. This compares to last year's draw of 40 BCF and the 5 year draw of 108 BCF. Yet, Celsius Energy sees gas storage data in the coming weeks showing draws lagging well behind the 5 year average and last year's draws for the periods, such that Celsius predicts that the current year's storage is seen rising to a triple digit surplus to both last year and the 5 year average.

CFTC data issued Monday for the week ended last Tuesday December 30 showed money managers covered shorts thus dropping their net short positioning by 22,176 contracts to a total of 83,730 contracts.

In notable trades in LN/NG options seen Monday, the February $5 call open interest on the CME rose by over 9,000 contracts. The February $5/$6 call spread traded heavily between 0.9 and 1.4 cents. The call spread is again today actively bid for at 0.7 cents and offered at 0.9 cents. Also seen Monday, the February March CSO $1.00 call traded 9.5 cents. The February march futures spread settled Monday at 63.0 cents. In the April October 6 month CSO, the minus 75 cent put was purchased against selling of 2.5 times as many of the minus $1.00 puts making for a flat cost for the buyer of the minus 75 cent put. Open interest for the April $4.00 call on the CME fell by 3,408 contracts. Part of the open interest drop was due to the call having been sold in a call butterfly. The $3/$4/$5 call butterfly traded 16.1 cents.

Technically, momentum for the spot NG futures basis the DC chart is getting oversold. The last 4 days have seen the largest dollar decline since January 3, 2023 and the largest four day percentage decline since Thursday, Dec. 2, 2021. (WSJ)

NG spot futures are again attacking support of 3.355-3.357, which was yesterday's low. Below that support comes in at 3.290-3.296. Resistance comes in at 3.507-3.509, which was almost tested with the overnight high of 3.502. Above that resistance is seen at the gap area created over the weekend at 3.563-3.572. 

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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