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- Daily Energy Market Update May 27,2025
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WTI is down 36 cents July RB is up 0.07 cents July ULSD is down 0.59 cents (these prices are versus Friday's settlement)
Overview
The watchword for crude prices today is "steady" as the market digests various stories that are offsetting for prices. OPEC+'s meeting has been moved forward, while President Trump is considering further sanctions against Russia. News wires also tout the positive element of the U.S. delaying imposition of 50% tariffs against the EU.
Russian Deputy Prime Minister Alexander Novak said on Monday that OPEC+ had yet to discuss hiking output. The group is likely to finalise output quotas in an online ministerial meeting on May 28. Eight OPEC+ members that had pledged additional voluntary cuts are now expected to meet on May 31, one day earlier than originally planned. (Reuters) Most news reports have the group planning to raise output by 411 MBPD in July.
President Trump is eyeing sanctions against Moscow this week as he grows frustrated by Russian President Vladimir Putin’s continued attacks on Ukraine and the slow pace of peace talks, according to people familiar with Trump’s thinking. But, the restrictions would not include new banking sanctions, as per one source. (WSJ)
Oil was supported as President Trump on Monday extended a deadline for his proposed reciprocal tariffs against the European Union. He said that he would delay imposing 50% tariffs on EU imports, moving it from June 1 to July 9. (Investing.com)
OPEC+ is doing its best to balance the oil market, but needs to be mindful of rising demand, the UAE Energy Minister said on Tuesday. He added that OPEC+ is doing its best to "ensure that we have enough investments in the supply. Demand is picking up, and the market is going to surprise us if we’re not investing in it.” (Reuters)
Russian Deputy Prime Minister Novak said that the G7 and EU plans to lower price cap for the Russian oil to $50 per barrel from the current level of $60 were unacceptable and that the restrictions have failed to curb Russian oil exports. (LSEG)
Iran on Monday ruled out suspending uranium enrichment as part of any nuclear deal with the United States -- a key demand from Washington in successive rounds of talks between the foes. Trump described the latest round of discussions in Rome as "very, very good", while Iran's foreign minister described it as "complicated". (AFP)
U.S. traffic volumes have been increasing at a rate of around 1% per year over the last twelve months. Highway volumes hit a seasonally adjusted record of 276 billion vehicle-miles travelled in March 2025 up from 272 billion in March 2024 and exceeded the pre-pandemic seasonal high of 271 billion in March 2019. But gasoline consumption remained well below pre-pandemic rates owing to significant improvements in vehicle fuel economy as well as the increasing penetration of electric vehicles. (EIA/Reuters)
Some wildfires have erupted in Alberta, Canada not far from oil wells. Similar wildfires shut in almost 1 MMBPD of Canadian oil production in 2016. Thus, these fires bear monitoring. (Market News)
The weekly petroleum statistics will be released one day later than usual this week due to the Memorial Day holiday. The API stats will be released Wednesday at 4:30 PM EDT. The DOE stats will be issued Thursday at 12 PM EDT. We will be keeping a keen eye on the gasoline data as the driving season has begun, when demand is normally seen increasing. But, as per Bloomberg, U.S. gasoline demand has tumbled to a five-year seasonal low on a four-week average basis.
Technicals
Momentum remains negative for the energies. The notion we proffered Friday of sideways price action in crude oil and RB remains operative.
WTI spot futures see support at 60.02-60.12 and then at 58.95. Resistance lies at 62.06-62.07, which was tested with the high Sunday night of 62.14. Above that resistance is seen at 62.91-62.98
July RB support lies at 2.0637-2.0644 and then at 2.0453-2.0479. Resistance comes in at 2.1011-2.1020 and then at 2.1193-2.1199. The 50 day moving average for the July RB intersects at 2.0889.
ULSD July futures see support at 2.0505-2.0527 and then at 2.0392-2.0405. Resistance comes in at 2.0914-2.0915, which was tested with a high Sunday night of 2.0937. Next resistance above that is seen at 2.1083-2.1096. The 50 day moving average for July ULSD lies at 2.0925.
Natural Gas - NG is up 0.5 cents
NG futures are near unchanged now after spending much of the prior 24 hours down versus Friday's settlement, as U.S. cooling demand for the week ending May 31 is forecast to be in line with the long-term normal, according to Bloomberg, citing the NOAA. The lack of strong weather demand is added to the recent spate of large storage injections that have weighed on the front end of the NG forward curve.
Celsius Energy says that gas storage inventories have topped 2500 BCF. This is 6 days sooner than the 5-year average (June 1) but 28 days later than last year (April 28).
U.S. domestic natural gas production is at 106.3 BCF/d today, which is the lowest since May 15, according to Bloomberg data.
Asia’s imports of LNG stagnated in May while Europe’s continued to ease as demand in both of the world’s top-importing regions entered the seasonal slump between winter and summer peaks. Compared to a year ago, Asia’s arrivals are down 4.5%, continuing the pattern of softer demand seen so far in 2025, as per a Reuters analyst. For the first five months of the year Asia's LNG imports are down 6.2% from the same period in 2024. The slip in demand is attributed mostly to lower Chinese demand, as high spot prices have rendered LNG uncompetitive. China’s LNG imports in May are seen at the weakest on a per day basis since March 2020, according to Kpler data. Prices above $10 per mmBtu are believed to make spot purchases uneconomic for the Chinese, according to the Reuters analyst. Friday's settlement in JKM futures for July delivery was $12.485. With China’s appetite limited, the question is why is the spot price rising from that seen in early May when it fell to near $11. The price rise may be driven more by supply than demand. Shipments from top regional supplier Australia dropped to a three-month low in May amid a reported outage at a major plant, while Malaysia’s exports slid to a nine-month low in May. Markets were also buoyed by reports that Egypt is seeking 40-60 LNG cargoes for the upcoming northern summer amid an energy crunch, which would likely suck some LNG away from Asian markets, especially from Middle East producers like Qatar and the United Arab Emirates.
European LNG demand has continued to ease in May, dropping by 4.4% in April, according to Kpler data. Europe’s intake has been dropping since reaching a 27-month high in March as the continent’s storages have been rebuilt. (Reuters) European inventories are seen at 46% of capacity at 1798 BCF. Inventories remain 18.4% / 405 BCF below the 5 year average and 32.4% / 863 BCF below year ago level. (Celsius Energy) Storage at this time last year was at 68.48% of capacity. (en.macromicro.me)
Today is the last trading day for the LN/NG June options. The nearby $3.25 strike had total open interest of 30,594 contracts as of Friday's close. The $3.00 strike had total open interest of 44,133 contracts, while the $3.50 strike had 49,521 contracts open.
The EIA gas storage data will be released at its usual time this week on Thursday at 10:30 EDT. Early estimates we have seen are calling for a build of 90 to 99.5 BCF. This compares to last year's build of 84 BCF and the 5 year average build of 98 BCF.
Technically, July NG futures have positive momentum. Resistance is seen at 3.754-3.758 and then at 3.831-3.837. The session high of 3.807 was seen at the opening on Sunday night. But, intraday charting shows prices basically were capped that night near 3.76. Support on the July daily chart comes in at 3.570-3.574 and then at 3.491-3.495.
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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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