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- Daily Energy Market Update June 6,2025
WTI is up 16 cents RB is unchanged ULSD is down 0.27 cents
Overview
News wires tout the fact that crude prices are on track for their first gain 3 weeks as trade talks are seen resuming between the U.S. and China. The market has reacted positively to the May Non Farm Payroll (NFP) data this morning.
President Trump and Chinese leader Xi resumed trade talks, raising hopes for growth and stronger demand in the world's two largest economies. Additionally, Canada also continued trade talks with the U.S., with Prime Minister Carney in direct contact with President Trump. (Reuters)
The May Non Farm Payroll (NFP) shows 139,000 new jobs added. The consensus was for +125,000. But, April and March data was revised down by a total of 95,000 jobs. Thus the report is more bearish than bullish for jobs. The energies have rallied in the first minutes after the data--likely on the better than expected May data.
Reports early-Friday showed Russia had launched a series of missiles and drone strikes against Ukraine, likely retaliation for several devastating attacks by Kyiv on Russian infrastructure earlier this week. President Trump has told reporters in the Oval Office that he will greenlight new sanctions on Russia if he sees a moment "when we're not going to make a deal and this thing won't stop." (Investing.com)
Alberta’s wildfire risk has eased because of rains this week, with the outlook for more rain in the coming days. RBN Energy analysts reported on Wednesday the 238 MBPD Cenovus site looks like it could resume shortly.
Open interest in calendar spread options this week reached a record high, according to the CME Group. The CFTC’s latest report shows that speculators hold the biggest net position wagering on a weaker US crude futures curve since 2020. Rising activity has been driven by “strong prompt, weak deferred balances, and a very changeable geopolitical environment that makes holding futures difficult.”, as per Energy Aspects comment. The news article suggests that some of the options positioning is being used to limit exposure which may exist in futures calendar spread positions. Similarly, in Gasoil on ICE, the structure of Europe’s diesel benchmark also currently have record open interest of about 180,000 contracts, ICE said. (Financial Post)
The market looks balanced in 2Q/3Q on our estimates as oil demand rises in summer and peaks in July-August, matching supply increases from OPEC+," HSBC said in a note. "Thereafter, accelerated OPEC+ hikes should tip the market into a bigger 4Q25 surplus than previously forecasted," the bank added. HSBC sees OPEC+ raising output by 411MBPD in August and by 274 MBPD in September. The bank sees OPEC+ unwinding their full 2.2 MMBPD cuts by the end of 2025. (Reuters/WSJ)
Technicals
Momentum remains positive for the energies basis their DC charts.
WTI spot futures have support at 62.17-62.19 and then at 61.57-61.65. Resistance lies at the prior 4 sessions' highs at 63.88-63.98. Above that resistance lies at 64.86-64.87.
July RB support comes in at 2.0151-2.0164. Resistance lies at 2.0907-2.0924. The 50 day moving average (2.0963) has crossed below the 100 day moving average (2.0982) on the DC chart. This is normally seen as a bearish indicator.
ULSD for July sees support at 2.0429-2.0454 and then at 2.0261-2.0270. Resistance lies at 2.1177-2.1184 and then at 2.1411-2.1418.
Natural Gas - NG is up 3.0 cents
NG futures are higher today. Traders are betting on rising temperatures and recovering LNG demand in the weeks to come, even as the storage injection seen Thursday was greater than forecast.
Lower 48 natural gas demand is estimated up 0.587 BCF/d today and the highest since April 11 at 72.45 BCF/d, Bloomberg shows. Demand is well above the previous five-year average around 66 BCF/d.
The GFS 6z 15day has risen nearly 20 CDDs nationally. (Market News) Forecaster Vaisala said Thursday that forecasts shifted warmer in the Midwest and Northeast for June 10-14. (MSN)
Plaquemines LNG secured FERC approval to flow gas to Block 12 yesterday, and they looked to be flexing that new capacity already as nominations hit 2.7 BCF/d last night and now 2.80 BCF/d with the early cycles today. (Criterion Research) Plaquemines had been running at a rate of about 2.0 to 2.2 BCF/d over the past 2 months.
The EIA storage disappointed with a build of 122 BCF, which was 9 to 12 BCF more than news wire surveys. This was the 6th straight week of +100 BCF injections. That is one week shy of the all-time longest streak of 100+ BCF injections seen in 2014. The streak of 100+ BCF injections is seen continuing the next 2 weeks possibly. Total storage rose in this week's data to 2.598 TCF. This is +117 BCF / +4.71 % versus the 5 year average, but -288 BCF/+9.98% versus last year's level.
Celsius Energy offered the following analysis to the EIA storage number: the 122 BCF storage injection seen in Thursday's EIA data thus puts this year’s to-date injection at a massive +825 BCF, which is 197 BCF bearish versus the 5-year average, and nearly 100 BCF ahead of the second highest level seen in 2020 of +728 BCF.
Thursday's settlements for NG futures on the CME showed the front losing value versus the back again. July spot futures fell by 3.9 cents and August fell by 2.9 cents, while December and January futures were down only 1 tick. As one fund manager says : " The forward curve shows higher prices as LNG projects “go live and demand outpaces supply.” Looking ahead to the winter, the January 2026 contract has already topped $5, but an energy consulting firm says they wouldn’t be surprised if the November, December and February contracts also break through $5 later this summer when traders start to focus on the winter months.
Today is the first day of the index fund roll in gas futures. The usual expectation was for longs to have to roll forward and thus for the first month to drop in value versus the third month, where longs were being moved to. But, in recent months the opposite has occurred as more short positions look to have been rolled forward and hence the front month has gained on contracts further back. Given the speculative interest leaning short, we suspect that the front month will hold against further back contracts, despite the large premium that the front month is carrying versus the cash and the large storage injections seen over the past 6 weeks.
Technically, NG still has positive momentum basis the DC chart. Resistance lies above at yesterday's high at 3.791 and then at 3.840. Support comes in at 3.608-3.613. The 100 day moving average intersects today at 3.696.
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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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