Daily Energy Market Update July 21,2025

Liquidity’s Daily Market Overview

Energies are mixed with WTI near unchanged, ULSD a bit higher, but RB down about 1 cent. The energies rallied somewhat a short while ago after some statements from the US Treasury Secretary. The crude oil price overall, though, is being buffeted by trade/tariff concerns on the one hand versus sanctions against Russia on the other hand.

Market watchers continue to monitor signs of near-term tightness and trade negotiations in the lead up to August 1 amid concerns about the wider economic impact of President Trump’s tariffs. (WSJ) This morning the following headlines were seen : "U.S. TREASURY SECRETARY BESSENT ON AUG 1 DEADLINE: QUALITY OF DEAL, NOT TIMING IMPORTANT" (Reuters) *BESSENT: DOESN'T HAVE TO GET UGLY WITH THE EUROPEANS" (Bloomberg)

WSJ commentary sees a range-bound price for crude oil due to the offsetting nature of the 2 factors of trade versus sanctions. "The lack of reaction shows that the market is not convinced by the effectiveness of these sanctions,” ING analysts say. “However, the part of the package likely to have the biggest market impact is the EU imposing an import ban on refined oil products processed from Russian oil in third countries.”  "The latest round of EU sanctions aren't necessarily going to change the oil balance. That's why the market is not reacting much," adds another analyst; "Russians have been very good at circumventing these kinds of sanctions.", the analyst added.  A Kremlin spokesperson said on Friday that Russia had built up a certain immunity to Western sanctions. (Reuters) The new price cap on Russian oil is set to take effect September 3rd. (ING)

CFTC data seen Friday showed money managers reduced their net length in WTI, but raised their net length in RB & ULSD in the week ended Tuesday July 15. WTI net length in futures/options on ICE/CME combined fell by 47,902 contracts as longs were sold and shorts added on the CME. RB net length rose by 12,131 contracts and ULSD by 7,555 contracts. Speculators increased their net long in ICE Brent by 16,398 lots. The increase was predominantly driven by new longs. Meanwhile, speculators continue to build their net long in ICE gasoil, amid a tightening in the middle distillates market. Speculators bought 6,384 lots to leave them with a net long of 90,168 lots, the largest position since July 2024. (ING)

In the EU plans for sanctions against Russia, the EU will no longer import any petroleum products made from Russian crude, though the ban will not apply to imports from Norway, Britain, the U.S., Canada and Switzerland, EU diplomats said. The EU has imported about 479 MBPD of refined fuel from India and Turkey so far this year, the majority of which was diesel, gasoil, jet fuel and fuel oil, according to data from analytics business Kpler. BNP analysis, though, offered the following opinion re the sanctions issued by the EU: "We expect limited impact from the lower price cap and tanker sanctions; landed prices for diesel in Europe could increase somewhat due to larger logistics issues to get products into Europe, but we think enforcement challenges limit the impact on flows,”.  (Reuters) Distillate prices fell back dramatically Friday as the import ban on Russian refined products obtained in third countries will have a transitional period of 6 months. (Market News)

The Baker Hughes oil rig count issued Friday showed a drop of 2 units. The Permian basin lost 2 rigs. This is the 12th consecutive week of declines, taking the cumulative decline to 53 over this period. (ING) The total oil rig count fell to 422 last week, the lowest total since September 2021, Baker Hughes said on Friday. (Reuters)

On Friday the following headline was seen : PHILLIPS 66 BAYWAY (NJ) CLOSE TO RUNNING NORMALLY AFTER POWER LOSS - Bloomberg. The 258.5 MBPD facility had lost power Tuesday of last week due to torrential rainfalls.

Late last week, Chevron announced that they are on the cusp of reaching a production plateau in the largest U.S. oil field, allowing it to reap billions of dollars of additional cash flow in the next few years. The company is cutting drill rigs and frac crews in the Permian basin of Texas and New Mexico as it approaches its long-term target of producing 1 MMBPD in the region.   (Bloomberg)


Freight Waves had the following  headline on Friday:" Mass layoffs continue across freight-related companies in the U.S." The article said that "another wave of closures and layoffs has hit workers and companies tied to commercial transportation, manufacturing, lumber production, distribution and logistics across the U.S." Some of the reasons cited for the layoffs and closures were inflation, "unforeseeable business circumstances" and "weak market conditions".

Energy Market Technicals

Momentum for the RB & WTI basis their September daily charts has turned negative. ULSD's September chart has positive momentum.

WTI September futures see support at 65.18-65.26. Resistance lies at the recent highs at 67.51-67.55.

Natural Gas Market Overview

Natural Gas--NG is down 15.7 cents
NG spot futures have gapped lower as production is robust--in fact near a record--and the weather forecast put out over the weekend is said to have cooled somewhat.

While the near-term temperature outlook remains hotter-than-normal, the forecast has cooled somewhat over the weekend, especially for the first week of August. (Celsius Energy) NatGasweather mentions that cooling of the outlook is not surprising since the 15 day CDD total is the highest in the past 50 years. NatGasweather adds that this week's U.S. demand is still set to be "very strong". They added that wind generation is set to be light in the 6-15 day forecast period. A bulge in the jet stream is developing as high pressure builds could create a persistent heat dome lingering well into August, an AccuWeather Meteorologist  said. The Kansas City, Missouri, area, which hasn't hit 100 degrees in two years, could reach the figure multiple times this week, he said. Dallas could see 100 degrees for the first time in 2025. (USA Today)

The Baker Hughes gas rig count issued Friday showed an increase of 9 units. The Haynesville basin added 3 rigs. The Baker Hughes U.S. gas rig count stands at 117 units, up 16 rigs, or 15.8% on the year. The total gas rig count is now the highest since March 2024. (Market News) NG futures fell Friday to a fresh low for the session after the rig count was issued. And the reaction further along the curve was more negative. August and September 2025 futures settled up 2.3/2.2 cents respectively, while the strip from December 2025 to November 2026 saw settlements of -2.1 to -3.4 cents The front end was likely being helped by the impending heat in the U.S. this coming week. The next day cash versus spot futures differential narrowed Friday to 6 to 8 cents from a differential seen earlier in the week of 20 cents. 

U.S. domestic natural gas production was estimated up to around 108.9 BCF/d over the weekend, according to Bloomberg data, compared to the previous 30-day average of 107.4 BCF/d. Celsius Energy adds that production near 108 BCF/d is up about 6 BCF/d versus a year ago level.

CFTC data seen Friday showed money managers lowered their net short positioning in NG futures/options on the CME  in the week ended Tuesday July 15. Mostly longs were added. The net short total fell by 27,600 contracts to 19,525 contracts. Celsius Energy says that money managers' long positioning have now increased by more than 50% since mid-May to 211,321 contracts, the highest since March 11. The ratio of longs-to-shorts is now 4% higher than this time last year.

A Reuters analyst detailed how Asian LNG imports have been sluggish the past 2 months, mostly due to lower Chinese demand. The soft July imports continue a trend this year of declining LNG arrivals in Asia, with the first seven months of 2025 down 6.3% from the same period last year. In contrast to Asia's declining LNG imports, Europe's have been trending higher, with the first seven months seeing arrivals up 24% from the same period in 2024, according to Kpler data. European LNG import demand has kept global prices elevated, leading to lower demand from price-sensitive buyers in Asia, especially China. In Asia, the spot LNG price dropped to $12.33/mmBtu in the week to July 14 from $12.90 the prior week. But for Chinese buyers, a spot price of above $10-$11/mmBtu is believed to make LNG imports uncompetitive against domestic output and pipeline supplies from Russia and Central Asia.

The large amount of LNG imports into Europe has contributed to ample supply that has seen TTF futures prices fall to a 2 week low. Today's low is Euro 33.400/Mwh, equal to $11.40/MMbtu.

Early estimates for the NG IEA gas storage data for this week's number are calling for a build from +28.7 to +39 BCF. Last year's build was 20 BCF and the 5 year average build is 30 BCF.

Momentum remains positive for the NG basis the DC chart, despite today's selloff. Support for the spot futures is seen at 3.335-3.336 and then at 3.293. Resistance lies at 3.469-3.475 and then at 3.574-3.576.

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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.

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