Daily Energy Market Update July 18,2025

Liquidity’s Daily Market Overview

Energies are higher--especially Gasoil and ULSD -- as the EU confirmed an 18th package of sanctions against Russia. The sanctions have lowered the oil price cap and are targeting 3rd country refineries. Supply disruptions in Kurdistan are also seen supporting oil prices.

The targeting of 3rd country refineries in the EU sanctions notably targets the 2nd largest refinery in India in which Russia has a 49% stake. (firstpost.com)  The EU will set a moving price cap on Russian crude at 15% below its average market price. The sanctions have thus lowered the oil price cap at present prices to $47.60 from the prior $60 cap, as per Reuters reporting. The EU foreign policy chief said that 105 ships in Russia's "shadow fleet" had been blacklisted, along with Chinese banks that "enable sanctions evasion", which she did not name.

Despite the drone attacks on the Kurdistan oil fields seen the past few days, Iraq's federal government said on Thursday that Iraqi Kurdistan will resume oil exports through a pipeline to Turkey after a two-year halt.  The Kurdish region will supply Iraq’s State Organization for Marketing of Oil (SOMO) with at least 230 MBPD. (ING)  Attacks on Kurdish oilfields have shut down more than 200 MBPD of production, according to the Association of the Petroleum Industry of Kurdistan. (WSJ)

ARA/ European Gasoil inventories fell in the latest report to the lowest level since January 2024.  The strength in the European middle distillate market is pulling in diesel from further afield, with reports of some shipments from East Asia to Europe. The strength in middle distillate cracks is providing a boost to refinery margins, which should see refiners increase run rates, helping to ease the tightness, as per ING commentary.  

In the first two weeks of July, global oil demand has averaged 105.2 MMBPD, up by 600 MBPD from a year earlier and largely in line with forecast, JPMorgan analysts said. (Market News)

Energy Market Technicals

Momentum remains positive for the energies on the September daily charts.

Technically the September ULSD is testing the daily chart's upper bollinger band that lies near 2.5225. September HO is currently trading near 2.54. The August Gasoil has tested its daily chart's upper bollinger band that lies at the $751 area. The ULSD and Gasoil forward curves have risen quite a bit in tandem with the flat price. Upside resistance for the September ULSD is seen first at 2.5817-2.5831 via the 60 minute September chart data from late June. Above that resistance is seen at the 2.6136 area. Support comes in at 2.4847-2.4868 via the September 60 minute chart. Below that support is seen at the 2.4536 area.

Natural Gas Market Overview

Natural Gas-- NG is up 4.0 cents
NG futures are slightly higher as the hottest weather of the summer is set to hit the US next week.

The EIA gas storage data was right in line with expectations with a build of 46 BCF. Total storage rose to 3.052 TCF. This is +178 BCF/+6.19%  versus the 5 year average, but -156 BCF/-5.11% versus last year. The market seemed to take the storage data as a slight negative given that it was above the 5 year average injection of 41 BCF. Next week's data is seen as a build of 39 to 41 BCF as per early estimates. This compares to last year's build for the period of 20 BCF and the 5 year average build of 30 BCF. Celsius Energy believes that the surplus to the 5 year average will rise to +200 BCF in the coming weeks. 

Meteorologists forecast the weather in the Lower 48 US states would mostly remain hotter than normal through at least August 1, with the hottest days of the summer expected next week. (Reuters) Forecaster Vaisala said forecasts remain above normal for the July 22-26 period across the US, with highs in the mid-90s expected in the middle of the country and in the east for the second half of the period. (Barchart)

NG production remains robust with LSEG saying yesterday that average gas output in the Lower 48 has risen to 107 BCF/d so far in July, up from a monthly record high of 106.4 BCF/d in June. On July 9, LSEG said that July output had averaged 106.7 BCF/d so far.

On Thursday, LSEG forecast average gas demand in the Lower 48, including exports, would slide from 110 BCF/d this week to 107.5 BCF/d next week. These forecasts were up 0.1 BCF/d total versus Wednesday's estimates.

The EU sanctions also have targeted the Nord Stream 2 pipeline between Russia and Germany, but the TTF gas futures reaction today showing an unchanged spot futures price signals that the sanctions will have little effect, given that the flow on the Nord Stream 2 pipeline never entered service.
 
At current there is a double bottom on the NG spot futures from yesterday/today at 3.511 / 3.513. Below that next support is seen at 3.453-3.454. Upside resistance lies at 3.629-3.635 and then at 3.738-3.742. Momentum remains positive for the NG basis the DC chart.

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