Daily Energy Market Update January 8,2026

Liquidity’s Daily Market Overview

Energies are higher as tension has ratcheted up with the US having seized tankers in the waters off Venezuela. Also lending support to energy prices today is a plan by the US to pass legislation for more sanctions against Russia. Some news wire accounts also cite the crude supply draw seen in the DOE data as supporting prices today.

The U.S. seized two Venezuela-linked oil tankers in the Atlantic Ocean on Wednesday, one sailing under Russia's flag. With a Russian submarine and vessels nearby, the seizure risked more confrontation with Russia. The U.S. is escalating its blockade of vessels that are under sanctions and going to and from the South American country. To enable the deal Trump described of sending upwards of 50 MMBBL of Venezuelan oil to the US, the U.S. is "selectively rolling back sanctions" on Venezuelan oil, White House Press Secretary Karoline Leavitt told reporters on Wednesday. Additionally, tension has been increased between the US and China as the US seeks to divert oil to the US, which was bound for China.  (Reuters)

Sen. Lindsey Graham announced Wednesday that President Donald Trump has approved a Russian sanctions bill designed to pressure Moscow to end its war with Ukraine. The bipartisan legislation is designed to grant Trump sweeping, almost unprecedented, authority to economically isolate Russia and penalize major global economies that continue to trade with Moscow. Most notably, the bill would require the United States to impose a 500% tariff on all goods imported from any country that continues to purchase Russian oil, petroleum products or uranium.  (Fox News)

Yesterday's DOE data showed a draw in crude oil stocks of 3.832 MMBBL, which beat forecasts. Yet, we see the crude oil draw as being largely due to the EIA's accounting adjustment, which reduced supply by 5.236 MMBBL. Net crude imports rose by 564 MBPD as imports rose by 1.387 MMBPD. This was offset slightly by the drop in crude production of 16 MBPD to a total of 13.811 MMBPD and the increase in crude oil inputs to refineries of 62 MBPD, taking the total to 16.909 MMBPD. Product inventories rose a lot. Gasoline stockpiles rose by 7.702 MMBBL. The rise in gasoline stockpiles came even as gasoline production fell by 472 MBPD. Gasoline demand fell by 393 MBPD to 8.170 MMBPD, lagging the prior 2 years demand by 311 and 155 MBPD. The gasoline inventories on the Gulf Coast rose to the highest level since early 2020, as per Market News reporting. Distillate supplies rose by 5.594 MMBBL. Distillate production remains strong, having risen on the week by 81 MBPD to 5.315 MMBPD. Distillate demand fell on the week by 183 MBPD to 3.195 MMBPD, beating last year's demand by 17 MBPD, but lagging that of 2 years ago by 237 MBPD.

Iraq’s cabinet has approved plans to nationalize operations at the West Qurna 2 oilfield, one of the world’s largest, as the government looks to avert disruptions stemming from U.S. sanctions imposed on Russian stakeholder Lukoil.  State-run Basra Oil Company will take over the oilfield’s operations for 12 months, two officials at the firm told Reuters. "We aim to keep production running smoothly, and will look for potential buyers for Lukoil’s stake during the 12-month period.", one Iraqi official said.

Energy Market Technicals

Momentum for the crude oils remains negative, while that for the distillates is turning neutral.

WTI has rebounded after the test yesterday of the lower bollinger band on the DC chart. Support is seen at 55.73-55.76, which is yesterday's low. The DC chart lower bollinger lies near there at 55.80. Resistance comes in at 58.13-58.18 and then at 58.87-58.88.

Natural Gas Market Overview

Natural Gas--NG is down 6.5 cents at $3.460
NG is lower now as the rally of the past 24 hours has petered out. As one colleague says "more is needed". The rally yesterday was seen due to a colder forecast, a bullish number expected for today's EIA gas storage data and some shortcovering. Some even suggest the lower gas production seen this month from last month is supporting prices.

Today's EIA natural gas storage data is seen as a draw of 114 to 120 BCF as per Reuters and WSJ surveys. This compares to last year's draw of 40 BCF and the 5 year average draw of 108 BCF.

Open interest for NG on the CME in Wednesday's activity shows an increase of nearly 10,000 contracts, even as February open interest fell by over 10,000 contracts. The February open interest drop (to us) supports the notion of shortcovering.

January U.S. natural gas production so far has averaged 109.0 BCF/d, down from December's record level of 109.7 BCF/d, as per LSEG data. On a daily basis, output was on track to drop to a three-week low of around 108.1 BCF/d on Wednesday due in part to declines in Arkansas and Texas, down from 108.5 BCF/d on Jan. 6 and a daily record high of 111.1 BCF/d on December 21, according to LSEG data.

Average gas flows to the eight large U.S. LNG export plants have risen to 18.6 BCF/d so far in January, up from a monthly record high of 18.5 BCF/d in December. (Reuters)

TTF European spot gas futures have gapped back down today --leaving yesterday's trading as an island top -for now. Support we had pegged at 26.9 Euros has almost been tested today with a low of 27.055. Momentum has turned back negative in the fall seen today. The move lower today comes even as storage data for European gas supplies has an overall bullish tone. European gas storage registered its largest daily withdrawal of the season Tuesday at -42 BCF/d (the 5 year average is a draw of 19 BCF/d). This pushed the storage deficit versus the 5 year average to a new multi-year high of -510 BCF. Storage is now 554 BCF below year ago level. Current European storage is 2.279 TCF; but, Celsius Energy is forecasting storage to fall below 1.0 TCF at withdrawal season's end. “The latest positioning data indicate that investment funds reduced their net short position in TTF for the third consecutive week,” ING analysts say. Over recent weeks, TTF has been limited in its upside price movement as the higher sourcing from LNG combined with steady sourcing from Norwegian pipelines has kept supply ample, some say. (Trading Economics)

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