Daily Energy Market Update July 10,2025

Liquidity’s Daily Market Overview

Energies are mixed with crude oil and RB lower, but HO higher. News wire accounts suggest that crude oil and RB are being weighed down by the DOE data seen yesterday as crude supplies rose quite a bit versus forecasts for a draw and gasoline demand is down 1% versus last year. President Trump's tariff policies are seen as a headwind. Bloomberg headlines regarding OPEC+ production policy caused a flurry of price activity this morning.

President Trump is raising trade threats, again unveiling a new batch of letters to country leaders outlining tariffs on goods imported from their countries beginning in August and a warning to BRICS nations. The highlight of Trump's Wednesday letters was a 50% tariff on goods from Brazil, citing its treatment of former President Jair Bolsonaro, now on trial in Brazil’s Supreme Court on charges that he plotted a coup in 2022.  Trump had posted 14 letters to countries on Monday, including South Africa, Malaysia, and Thailand, outlining tariffs ranging from 25% to 40%.  (Yahoo Finance)

Bloomberg headlines today regarding OPEC+ policy have caused some sharp moves in crude prices. The headlines read as follows: "*OPEC+ IN TALKS ABOUT OIL PRODUCTION FROM OCT.: DELEGATES” . "*OPEC+ DISCUSSES PAUSING OUTPUT HIKES FROM OCTOBER: DELEGATES” . WTI rose to its 68.65 high for the day on the news, only to fall back immediately thereafter to a fresh low for the day. A further output hike in September is expected from OPEC+ to thus restore production to the level that existed before their 2.2 MMBPD cuts were initiated in 2023, as they are seen raising output by 550 MBPD in September. Bloomberg reporting added that OPEC+ will likely wait for some time before moving onto reversing another layer of cuts that were implemented prior, amounting to 1.66 MMBPD, the delegates said.

The DOE stats were almost the exact same as the API data --one of the first times we have seen such in a very long time. The build of 7 MMBBL in crude oil inventories seems to be mostly a function of the DOE's accounting adjustment, which shows an increase in supply of 1.771 MMBPD, which equates to a supply increase of 12.4 MMBBL due to the accounting adjustment. The API had shown a build in crude supplies of 7.1 MMBBL. Net crude oil imports fell by 1.358 MMBPD --thus dropping by almost 1/2 of the increase seen last week. Crude oil exports rose by 452 MBPD and crude oil imports fell by 906 MBPD. Gasoline supplies fell by 2.658 MMBBL, almost the same as the API data which showed gasoline supplies falling by 2.2 MMBBL. Distillate supplies as per the DOE fell by 0.825 MMBBL, in line with the API draw of 0.8 MMBBL. Product demand is mixed this week. Gasoline demand rose by 519 MBPD on the week to 9.159 MMBPD , thus beating 2023 demand of 8.756 MMBPD, but lagging slightly behind 2024 demand of 9.398 MMBPD. Distillate demand fell on the week by 375 MBPD to 3.668 MMBPD; but that still beats 2024 and 2023 demand by 200 to 700 MBPD.

OPEC doubled down on its view that global oil demand will keep rising through mid-century and that there is no peak in sight. In its annual report on long-term energy trends, the cartel nudged up its forecast, projecting oil demand will reach 113.3 MMBPD in 2030 and nearly 123 MMBPD in 2050, up from 103.7 MMBPD last year. Oil is expected to hold nearly 30% of the energy mix, while combined with gas it will stay above 50% through the period, OPEC says, adding that "there is no peak oil demand on the horizon."  Demand for all major energy sources is set to rise through 2050, with the largest increases coming from renewables, as per the OPEC report. (WSJ)

Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least seven days rose by +3.6% w/w to 79.55 MMBBL in the week ended July 4. (Barchart)

In WTI options on Wednesday on the CME a trade was seen in the Calendar strip of 2026. Each of the 12 months' one month calendar spreads had a butterfly call option trade. The flat/75 cent/$1.50 call butterfly was traded at a cost of 13 cents to the buyer of the wings ( the flat and $1.50 calls)  versus the selling of twice the amount of the body (75 cent call). The trades were initiated given that open interest in these strikes rose by 3600, 7200, and 3700 contracts as per CME data.

WTI crude oil interest on the CME rose by a total of 37,151 contracts in Wednesday's activity, with the September, December and January contract months seeing increases. The feeling is that even as crude prices settled near unchanged that the buyers were "more the aggressors" with price action after the DOE data showing an upward pattern into the close of trading.

Energy Market Technicals

Momentum for RB and the crude oil remain positive basis the DC charts, while momentum for the ULSD is neutral, despite the recent rally.

WTI spot futures see support at 66.53-66.60 and resistance at the double top from Tuesday/Wednesday at 68.91/68.94.

Natural Gas Market Overview

Natural Gas --NG is up 4.7 cents
NG spot futures are higher today after settling yesterday at the lowest level since May 28. Today's price rise was seen due to stronger feed gas volume to LNG export plants. Yesterday's fall in prices was due to a cooler weather forecast, worries over rising storage and a weaker cash market.  

Total feedgas flows to U.S. LNG export terminals are up 0.530 BCF/d on the day at 15.54 BCF/d today, Bloomberg shows, compared to the 30-day average of 14.51 BCF/d. The uptick is driven by higher feedgas deliveries to Corpus Christ. Flows into the facility had been restricted since Saturday due to pipeline maintenance. Reuters reporting shows the July feedgas volume to be 15.6 BCF/d, up from 14.3 BCF/d seen in June and 15.0 BCF/d seen in May.

The EIA gas storage number due out today is seen as a build of 58 BCF as per the WSJ survey. This compares to last year's build of 61 BCF and the 5 year average build of 53 BCF.

Forecaster Vaisala said Wednesday that forecasts shifted cooler in the Midwest for July 14-18 and weather outlooks shifted cooler for the eastern half of the US for July 19-23. (Barchart)

The August LN options open interest rose quite a bit as per CME data from Wednesday's trading. The $3.50 strike was one of those that rose. One trade saw the $3.50 call against selling of twice as many of the $3.75 calls for a cost of 1.2 cents to the $3.50 call buyer. The $3.50/$3.75 call spread went one for one at a cost of 3.35 cents. Additionally, in the LN options on the CME,  3,000 contracts of the October January $-1.00 call were sold against buying of the $-1.50 put at a cost of 4.1 cents to the put buyer. The October January spread settled Wednesday at $-1.336.  And in the October November one month calendar spread put options, the $-0.50 put was purchased against selling of the $-0.75 put at a cost of 4.0 cents. Open interest data from the CME suggests that the $-.50 put was bought to close out a position, while the $-0.75 put portion of the trade was an initiation of the position. The October November spread settled at -41.5 cents Wednesday.

Technically NG spot futures have negative momentum, although that downward momentum seems to be slowing. Support at 3.145-3.152 was tested Wednesday with the low of 3.149. Below that support is seen at 3.091-3.098. Resistance lies above at 3.350-3.359.

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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