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- Daily Energy Market Update May 20, 2026
May 21, 2026
Liquidity’s Daily Market Overview
Energy Market Update
Oil prices are pulling back this morning as traders react to mixed headlines surrounding the Iran situation. Comments from President Trump suggesting a quicker path toward ending the conflict helped remove some geopolitical premium from the market, pressuring both Brent and WTI lower heading into the U.S. session. Vice President JD Vance also noted progress in negotiations between the U.S. and Iran, further weighing on sentiment.
At the same time, the market remains extremely headline-sensitive as reports also suggest the U.S. could still consider military action against Iran within the next two to three days if negotiations stall. That uncertainty is keeping a floor under crude prices, particularly with traffic through the Strait of Hormuz still heavily disrupted. Concerns over prolonged supply interruptions in the region and tightening global crude inventories continue to support the broader bullish backdrop despite today’s weakness.
Analysts noted that even if a diplomatic agreement is eventually reached, supply conditions are unlikely to normalize quickly. Iranian production and exports would take time to recover, meaning the market could remain undersupplied in the near term. Ongoing inventory tightening and low global stock levels are continuing to reinforce expectations for elevated volatility and further upside risk if tensions escalate again.
On the macro side, traders are also watching rising U.S. Treasury yields, which are signaling tighter financial conditions and raising concerns about future demand growth. Meanwhile, attention later today will turn to the EIA inventory report, with expectations for a roughly 3.4 million barrel draw in U.S. crude stockpiles — another sign that underlying supply conditions remain tight.
Energy Market Technicals
Crude (CLN6)
The bearish divergence we flagged yesterday is starting to play out. Crude took out yesterday’s low and is trading near session lows heading into the start of the U.S. session. Momentum remains elevated and is still sitting in overbought territory.
Resistance comes in at Monday’s bearish divergence high at 105.21, followed by the upper Bollinger Band at 105.74.
If the correction lower continues, support comes in at:
94.52 — 38.2% Fibonacci retracement of the move from the April 17 low to Monday’s high
91.21 — 50% Fibonacci retracement
87.91 — 61.8% Fibonacci retracement
Crude (CLN6)
Heating Oil (HOM6):
Heating oil has also pulled back and is trading near its overnight low heading into the start of the U.S. session. Momentum remains elevated, but is only just in overbought territory.
Resistance continues to come in at the upper Bollinger Band at 4.2089, followed by the April 30 reversal bar high at 4.2549.
Support levels come in at:
3.8405 — 38.2% Fibonacci retracement of the move from the April 17 low to the April 30 high
3.7125 — 50% Fibonacci retracement
3.5845 — 61.8% Fibonacci retracement
Crude Spread (CLZ6/CLZ7)
The spread is opening the U.S. session near its overnight low at 10.03. Momentum remains overbought, and even with the overnight selloff, price is still trading above the early-May high at 9.97.
Resistance levels come in at the Monday/Tuesday double top at 10.92, with the upper Bollinger Band sitting in the same area at 10.94.
Support levels come in at:
7.55 — 38.2% Fibonacci retracement of the move from the April 8 low to Monday’s high
6.51 — 50% Fibonacci retracement
5.48 — 61.8% Fibonacci retracement
Crude Spread (CLZ6/CLZ7)
Natural Gas Market Overview
Natural Gas (NGM6):
Natural Gas remains extremely overbought following the breakout that began on May 11. The market made a new high at 3.14 before backing off, trading around 3.06 heading into the start of the U.S. session.
Over the past two sessions, closes were outside the upper Bollinger Band. However, if today closes below 3.08, it would trigger a reversal signal based on a close back inside the upper Bollinger Band after two consecutive closes above it. It would also mark a reversal from the new high with a close back below yesterday’s close. This bearish confluence suggests we could see a deeper pullback before the broader uptrend resumes.
The upside objective from the breakout remains the March 27/28 double top at 3.19, followed by the 38.2% Fibonacci retracement level at 3.21.
Similar to what occurred on the initial breakout, the market may retrace toward Fibonacci support before resuming higher. Support levels come in at:
2.92 — 38.2% Fibonacci retracement (typically the deepest retracement seen within a strong trend)
2.86 — 50% Fibonacci retracement
2.80 — 61.8% Fibonacci retracement
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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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