Daily Energy Market Update July 2,2025

Liquidity’s Daily Market Overview

Energies are higher as Iran has suspended cooperation with the UN's nuclear watchdog, thus increasing geopolitical tension. The expected OPEC+ increase in supply at this week's meeting is seen as being priced into the market already. A weaker dollar of late is seen as having supported energy prices. ULSD is the strongest contract in the energies today as the API data saw a large draw in distillate stocks versus builds in gasoline and crude supplies.

Iran announced it was suspending cooperation with the U.N. atomic agency. Tehran's decision to deny international inspectors access to its main nuclear sites to assess the damage done by U.S. and Israeli airstrikes heightens tensions with Washington and other Western powers. Iran has threatened to halt cooperation with the IAEA, accusing it of siding with Western countries and providing a justification for Israel’s air strikes, which began a day after the IAEA board voted to declare Iran in violation of obligations under the Nuclear Non-Proliferation Treaty. The law stipulates that any future inspection of Iran’s nuclear sites by the International Atomic Energy Agency needs approval by Tehran’s Supreme National Security Council.  (WSJ/Reuters)

Saudi Arabia's oil exports jumped to the highest level in more than a year in June as the kingdom shipped more crude to overseas storage amid fears of possible supply disruptions owing to conflict in the Middle East. Crude exports rose by 450 MBPD from May's level to 6.33 MMBPD in June, Kpler data shows. There could be a further increase in July to almost 7.5 MMBPD, according to Kpler. (Reuters)

A Guardian publication headline reads: U.S. dollar has worst first half in more than 50 years amid Trump tariffs. The dollar index ended June 30 down 10.8% since the start of the year. That is its worst performance over the first six months of any year since 1973, and the worst half-year since the second half of 1991. This sell-off has pulled the dollar index down to its lowest level since March 2022.

API                   Forecast          Actual     
Crude Oil       -0.583/-2.5      +0.68
Gasoline         -0.2/-2.07        +1.92
Distillate         -1.0/-4.06       -3.458
Cushing              n/av             -1.417
Runs               +0.4/+1.4%       n/av

The private sector lost 33,000 jobs in June, badly missing Dow Jones expectations for a 100,000 increase, ADP said this morning. The May job growth figure was revised even lower to just 29,000 jobs added from 37,000. “Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,”  ADP’s chief economist, said.  (CNBC)


Diesel cracks are likely to soften in the months ahead, according to FGE consultants, cited by Bloomberg.  “A light refinery maintenance period in the Atlantic Basin coupled with continued high margins should incentivize refiners to run flat out, which should then bring diesel cracks lower,” they said. U.S. Gulf coast gasoil/diesel exports to Europe were seen hitting around 325 MBPD in June, according to Kpler data, the highest since December, 2024.  “We expect U.S. production of combined renewable diesel and biodiesel in the second half of 2025 to rebound to year-ago levels,” FGE added. “Higher biomass-diesel output will also contribute to robust exports to Europe, capping diesel cracks there", FGE said.

In the Mideast, product inventories at the key oil hub of Fujairah climbed for a fourth consecutive week, led by a 33% rise in jet fuel, diesel and other middle distillates, as overall exports slowed for June. This marked the longest stretch of gains since February 2022, according to Fujairah Oil Industry Zone data shared with Platts since 2017. Middle distillates, including jet fuel and diesel rose to their highest level since March 31. Total stocks were up 23% since the end of 2024, with middle distillates up the most at 38%, followed by light distillates, which rose 23%, and heavy distillates, which increased 19%.

Traders shipped the most jet fuel from Northeast Asia to Europe in almost a year in June as lower freight rates and ample Asian supplies spurred exports. Northeast Asia jet fuel exports rose in June as refiners increased production after completing maintenance at their plants and as "product cracks" strengthened, according to Vortexa analysts commentary. These trade flows "were purely opportunistic, spurred by geopolitical tensions that sent Northwest Europe cracks surging, while freight rates on modern newbuild vessels remained attractive enough to justify the move", said a Kpler analyst. Physical jet fuel prices in Northwest Europe were $60 to $80 per ton higher than in Asia for most of June, LSEG data showed. Analysts did not expect Asian jet fuel prices to rise with the increase in exports to Europe, as the Asian realm remains chronically net long jet/kero by around 625 MBPD in June and July, as per Kpler analysis. Chinese exports of jet fuel are seen remaining strong. (Reuters)

Hedge funds sold energy stocks last week at the fastest pace since September 2024 and at the second-quickest clip in the last 10 years, as oil prices fell on easing Middle East tensions, a Goldman Sachs note seen by Reuters on Monday showed. Last week’s selling in the sector was the biggest in almost a year and the second largest in the last decade, said the Goldman note. Shares of oil, gas and consumable oil companies as well as energy equipment and services firms were sold. Hedge fund selling focused on every region but primarily on North America and Europe, said the note. In Europe, hedge funds added short positions and fled long bets, said Goldman. While many increased short bets against energy companies, speculators’ total combined positions remained proportionately long on global energy stocks, data from the note showed.

Energy Market Technicals

RB & WTI spot futures are near oversold basis the momentum on the DC charts. The energies look poised to see momentum turn positive.

Today the spot WTI futures price has tested the high seen in the prior 5 sessions. Today's high is 66.43. The prior 5 sessions' high is 66.42. Above this next resistance lies at 67.83. Support lies at 64.50-64.51, which are 2 of the prior 5 sessions lows.

RB spot futures see support at 2.0756-2.0758 and then at 2.0585-2.0590. Resistance comes in at 2.1213-2.1239 and then at 2.1403-2.1419.

ULSD for August sees support at the 2.3100 area. Resistance comes in at 2.3826-2.3855 and then at the 2.400 area.

Natural Gas Market Overview

Natural Gas--NG is up 3.5 cents
NG futures are higher as the rally has likely been fueled by an increase in demand due to strong power generation burns and an increase in feed gas demand volumes to LNG plants.

Based on electrical grid data,  the natural gas power burn demand has eclipsed year-ago levels each of the past eight days and, per Tuesday’s intraday numbers, was on track for a ninth straight near 2025 highs just below 50 BCF/d. This was seen as being due to weaker wind generation, hot temperatures along the populous Eastern Seaboard and some coal back to gas switching, as per Celsius Energy.

Tuesday’s LNG feedgas demand rose to 15.6 BCF/d, up 3.2 BCF/day versus last year. The gains come courtesy of volumes to Corpus Christi jumping to a new all-time high of 2.59 BCF/d. (Celsius Energy) June feed gas demand averaged 14.4 BCF/d as per LSEG data.

Notable to us was the fact that on Tuesday, as the August NG futures fell to their lowest level since December 18 on the daily chart basis, the October January spread actually narrowed during much of the day. We believe that this was due to 1) possibly some profit taking on the spread --but more likely (2) the winter strip was being sold as concerns over winter supply are possibly abating. Evidence of the winter strip being sold was the fact that during much of the trading session. the winter strip of the NG curve was down more than any other months trading. In early trading this morning, we are seeing a similar pattern, as the spot August futures are up 4.5 cents at this writing, while the November through March strip is up 2.2 to 3.4 cents.

The rally the past 24 hours has seen momentum basis the DC chart turn positive. Resistance lies at 3.513-3.515 and then at 3.576. Support is seen at 3.335-3.340. 

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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