Daily Energy Market Update May 18, 2026

Liquidity’s Daily Market Overview

Energy Market Update

Energy markets opened the session with a strong geopolitical bid, building on overnight strength as crude pushed higher on continued concerns around Persian Gulf stability and potential supply disruption risk. Early trade remained supported by the broader risk premium, with traders still leaning on escalation fears tied to the Iran conflict and associated threats to regional flow through the Strait of Hormuz.

That tone shifted as the morning progressed following a series of media reports via Al Arabiya outlining amended positions in the Iran negotiations. According to the report, Iran has softened elements of its stance, including stepping back from direct compensation demands and shifting toward economic facilitations instead. The leaked framework also points to a conditional transfer of enriched uranium to Russia rather than the U.S., alongside proposals for a gradual and structured reopening of the Strait of Hormuz.

Additional reported details include a preference for a multi-stage truce, a clearer separation between maritime security and nuclear negotiations, and involvement from regional intermediaries such as Pakistan and Oman to help manage potential friction in the Strait. While unconfirmed, the tone of the leaks was interpreted as a move toward a more phased and politically flexible negotiating framework.

For the market, the key shift was the transition from escalation-driven pricing into the morning, to a more de-escalation-sensitive tone later in the session. The initial geopolitical bid in crude was partially unwound as traders reassessed the near-term supply disruption premium in light of potential diplomatic progress.

Energy Market Technicals

Crude (CLM6)

Crude was up 0.92 to start the U.S. session. It reached a high of 108.70 overnight but has since backed off. Price is approaching the upper Bollinger Band at 109.47. Momentum has crossed higher but is not yet in overbought territory, suggesting the move is not yet stretched.

The market was grinding slowly higher as there has still been no agreement with Iran, while Trump continues to remind them that the clock is ticking.

On the topside, the key levels to watch are the upper Bollinger Band at 109.47 and the previous high at 110.93.

Any sign of a workable agreement could pressure prices lower. On the downside, levels to watch are the 20-day moving average at 99.56, followed by the lower Bollinger Band at 89.67.

Heating Oil (HOM6):

Heating Oil opened the U.S. session at 4.0919, up from Friday’s close at 4.0534. Volatility continues to compress and is now sitting at multi-month lows. The last time volatility was this low was in late February. Price is currently trading near the upper end of its recent price structure.

Levels to watch on the topside are:

4.2004 — Upper Bollinger Band
4.2549 — April 30th high

Support levels to watch:

3.9389 — 20-day moving average
3.6771 — Lower Bollinger Band

Crude Spread (CLZ6/CLZ7- Current Level: 9.69)

The spread made a new overnight high at 10.23 before backing off and is now sitting close to unchanged, up 0.35 on the session. There was bearish divergence on the move higher, as momentum failed to confirm the new high.

At the previous high on May 4th at 9.97, momentum was extremely overbought. On this latest push to new highs, momentum did not even reach overbought territory, suggesting the rally lacked strength and may be vulnerable to a pullback.

Key levels to watch remain the previous high at 9.97 and the upper Bollinger Band at 10.30.

Support comes in at 7.78, the 20-day moving average, followed by the double bottom and lower Bollinger Band at 5.18.

Natural Gas Market Overview

Natural Gas (NGM6):

Natural Gas is opening the U.S. session up 8 cents at 3.04, trading above the upper Bollinger Band after successfully holding the 38.2% Fibonacci retracement following the initial breakout higher. As expected, volatility is now expanding from the multi-month lows that were flagged last week.

The move confirms the market is attempting to transition out of its prolonged consolidation phase, with buyers continuing to defend pullbacks into key retracement support levels.

Key resistance from here comes in at 3.19, the double top from late March, followed closely by 3.21, the 38.2% Fibonacci retracement of the move from the January high to the April low.

On a pullback, the key support levels to watch are:

• 2.88 — 38.2% Fibonacci retracement
• 2.82 — 50% Fibonacci retracement
• 2.77 — 61.8% Fibonacci retracement

A close below 2.72 would negate the recent breakout attempt and suggest the market has returned to its prior trading range.

If Natural Gas stabilizes and resumes higher from current levels, 3.20–3.21 remains the first upside objective.

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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