Daily Energy Market Update July 11,2025

Liquidity’s Daily Market Overview

Oil prices are higher on prospects of potential U.S. sanctions on Russian oil. The up tick in prices today is also supported by the IEA citing peak summer demand, even as they raised their global oil supply growth forecast for this year.

President Trump said he plans to make a “major” statement on Russia on Monday. President Trump has become increasingly frustrated with President Putin as President Trump's efforts to broker peace in Ukraine fall short. A bipartisan Russia sanctions bill is gaining momentum in the Senate and could soon come to a vote. The sanctions bill would levy heavy tariffs on imports from countries that purchase Russian uranium, gas and oil.  A leading Democrat Senator said :"Vladimir Putin should get the word if he wants to come to the table, now is the time. Otherwise, his economy is going to be hit hard, because India and China will have every incentive to shop elsewhere for their oil and gas,”.  (CNN)

The IEA on Friday said the global oil market may be tighter than it appears, with demand supported by peak summer refinery runs to meet travel and power-generation. The IEA expects global supply to rise by 2.1 MMBPD this year, up 300 MBPD from their previous forecast. World demand will rise by just 700 MBPD, it said, implying a sizeable surplus. Annual growth eased from 1.1 MMBPD in Q1 2025 to just 550 MBPD in Q2 of 2025. But, the IEA says "price indicators also point to a tighter physical oil market than suggested by the hefty surplus in our balances."  As examples of price indicators suggesting a tighter market, the IEA cited strong refining margins and the strong backwardation along the crude oil curve. Given rising seasonal demand, refinery crude processing rates will increase by 3.7 MMBPD from May to August to meet Northern Hemisphere travel demand, the IEA said.  Also, a doubling in crude burning in refineries for power generation, typically to meet air conditioning needs, to around 900 MBPD will further tighten the market, it said. Nonetheless, the agency said this year's forecast for global demand growth of 700 MBPD is the slowest since 2009, excluding 2020 when demand contracted due to the COVID pandemic. The IEA lowered their 2026 demand growth forecast by 20 MBPD to +720 MBPD, reaching 104.4 MMBPD. The IEA sees supply growth in 2026 of 1.3 MMBPD to a total 106.4 MMBPD., with non-OPEC+ producers dominating growth.   (IEA.org /Reuters)

US President Donald Trump has said he will impose a 35% tariff on Canadian goods starting on 1 August, even as the two countries were days away from a self-imposed deadline to reach a new trade deal. The announcement came in the form of a letter published on Trump's social media platform Truth Social, along with additional threats of blanket tariffs of 15% or 20% on most trade partners. Trump has sent more than 20 such letters to other US partners this week. He also says he will soon announce new tariffs on the European Union.  (BBC.com)

Thursday's fall in oil prices was seen primarily due to a Bloomberg report that OPEC+ will pause their production increases come October.  Traders are probably interpreting the OPEC+ talks as a sign that “the market may not be able to cope with more oil.", as per one analyst cited by Bloomberg. The analyst added :"“We are potentially seeing the risk of an oversupplied market” once the peak demand period ends."

Energy Market Technicals

Momentum for the energies is positive basis the DC charts.

WTI spot futures see support at the double bottom from yesterday/today at 66.45-66.50. Below that support comes in at 65.22-65.29. Resistance is seen at 68.91-68.94, which are the highs from Tuesday/Wednesday of this week. Above that resistance lies at 70.22-70.29.

Natural Gas Market Overview

Natural Gas-- NG is up 3.6 cents
NG futures are higher supported the last 24 hours by several factors: a "benign" EIA storage number, higher feed gas volume to LNG plants, and a stronger demand forecast. Next day cash prices are firmer today as well.

Henry Hub (HH) next day cash is quoted 3.200/3.225 versus August NG futures printing 3.364, thus keeping the cash versus futures differential at the 15 cent area we have seen in recent days. Yesterday, the HH cash was seen at 3.100-3.130.

The EIA gas storage build seen Thursday was 53 BCF, which was seen as bullish as it was 5-6 BCF less than forecast. Yet, the 1,233 BCF placed into storage since the start of the injection season is the second-largest amount since 2010, as per one analyst. (WSJ) Total storage rose to 3.006 TCF, which is +173BCF/+6.11% versus the 5 year average, but -184 BCF/-5.77% versus last year.

The average amount of gas flowing to the eight big U.S. LNG export plants rose to 15.6 BCF/d so far in July as liquefaction units at some plants slowly exited maintenance reductions and unexpected outages. July's volume is up from the volume of 14.3 BCF/d seen in June. And Reuters reports that on a daily basis, LNG export feedgas was on track to rise to a 10-week high of 16.0 BCF/d on Thursday with flows to U.S. energy company Cheniere Energy’s 3.9-BCF/d Corpus Christi plant in operation and under construction in Texas expected to rise from 1.5 BCF/d on Wednesday to 2.2 BCF/d on Thursday, according to LSEG data.

With hotter weather expected, LSEG forecast average gas demand in the Lower 48, including exports, would rise from 107.3 BCF/d this week to 108.8 BCF/d next week. These forecasts were up 1.2 BCF/d versus those seen Wednesday.

There were a slew of NG/LN options trades seen on the CME Thursday. The October January spread fence traded again. The -$1.00 call was sold against which the -$1.50 put was purchased at a cost of cents to the put buyer of 4.2 cents. The same trade was executed Wednesday at a cost of 4.1 cents to the put buyer. Additionally in the October January calendar spread options, the  -$1.25 / -$1.00 call spread traded in a 1x2 ratio with the buyer of the -$1.25 call paying 3.2 cents.  The October $3.25 / $2.50 put spread traded in a 1x2 ratio with a cost of 15.6 cents to the $3.25 put buyer --with delta October futures bought at $3.40. 

Technically momentum for the NG futures basis the DC chart is trying to turn upward. Support is seen at 3.272-3.275 via the August 60 minute chart. Below that support lies at 3.214-3.217. Resistance at the 3.350 area has been pierced with next resistance above seen at the highs from Monday/Tuesday of this week at 3.469-3.472.

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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