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- Daily Energy Market Update July 2, 2026
Overnight energy markets remained focused on the continued unwinding of the geopolitical risk premium. Brent crude fell for a third consecutive session, trading below $71 per barrel for the first time since before the Iran conflict began, while WTI has now retraced the entire conflict-driven rally, with prices returning to pre-war levels. As concerns over disruptions through the Strait of Hormuz continue to ease, traders have shifted their focus back to underlying global supply and demand fundamentals.
The return of crude prices to pre-conflict levels reflects growing confidence that Middle East oil flows will remain uninterrupted. With no significant supply outages emerging from the conflict, the market has continued to remove the risk premium that had been built into prices during the escalation.
Natural gas has been more resilient than crude. European benchmark gas futures held near their highest levels in more than two weeks following Wednesday's rally, highlighting that regional gas fundamentals remain comparatively tight. The divergence between weaker crude prices and firmer natural gas suggests the two markets are currently being driven by different fundamental factors.
With the July 4 holiday weekend approaching, trading activity could begin to thin as traders reduce risk ahead of the long weekend.
Crude (Cont. Contract)
Crude oil is opening the day down 1.11 at 67.48. Yesterday's close broke below the short-term trading channel that had developed over the past five sessions, and today's price action continues to show downside pressure.
Today's decline has completely filled the conflict-related price gap, removing one of the last remaining technical reminders of the geopolitical premium.
Momentum remains extremely oversold, but momentum indicators continue to cross lower and point downward, suggesting there may still be room for additional downside before a meaningful reversal develops.
Key Levels
Resistance
74.25 – 200-day moving average
78.60 – 20-day moving average
85.53 – 38.2% Fibonacci retracement (May high to overnight low)
Support
61.35 – Lower Bollinger Band
Crude (Cont. Contract)
Heating Oil (HOQ6)
Heating oil is trading lower this morning at 3.1800. Yesterday's high tested the key 20-day moving average, which has capped prices for the past several weeks. The last close above this level occurred on June 3.
Today marks the first lower low following six consecutive sessions of higher lows, suggesting the recent recovery may be losing momentum.
Momentum has moved out of oversold territory but continues to point lower, indicating that additional downside pressure may develop in the near term.
Key Levels
Resistance
3.2841 – 20-day moving average
3.3563 – 38.2% Fibonacci retracement (May high to June 18 low)
3.4660 – 50% Fibonacci retracement
Support
3.0013 – Mid-June low
2.9045 – Lower Bollinger Band
2.6865 – 200-day moving average
Heating Oil (HOQ6)
Crude Spread (CLZ6/CLZ7)
The spread is opening down 0.42 at 1.55 this morning. Yesterday marked the first close below the 200-day moving average since January 26. Prices had tested and held this key level four times over the past six sessions, suggesting the potential for a bounce, but overnight trading has followed through to the downside after yesterday's bearish close.
Momentum remains oversold and continues to point lower, suggesting downside pressure is still present and the spread could remain under pressure in the near term.
Key Levels
Resistance
2.25 – 200-day moving average
4.31 – 20-day moving average
5.13 – 38.2% Fibonacci retracement (May high to overnight low)
Support
0.40 – Lower Bollinger Band
Crude Spread (CLZ6/CLZ7)
Natural Gas Market Overview
Natural Gas (NGQ6)
Natural gas is opening down 0.05 at 3.170. Prices are trading just below the key support level at 3.183, the 50-day moving average, which has held on a closing basis eight times over the past two weeks. A close below this level would mark a decisive break of support.
Momentum has moved into neutral territory and continues to point lower, suggesting downside pressure is building.
Key Levels
Resistance
3.228 – 20-day moving average
3.345 – Upper Bollinger Band
3.377 – Double top (June 22 and June 26)
Support
3.110 – Lower Bollinger Band
3.059 – Reversal bar low from June 15
3.001 – Reversal bar low from May 27
Natural Gas (NGQ26)
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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
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