Daily Energy Market Update November 21,2025

Liquidity’s Daily Market Overview

Overnight RB and crude oil prices fell to their lowest values in a month as geopolitical tension is said to be easing as the US is pushing for a peace deal in the Ukraine conflict. Distillate prices are down more than RB and crude oil, having risen earlier in the week on Russian supply worries, which now are seen easing if a solution is found to the war in Ukraine. A stronger U.S. dollar also was seen weighing on oil prices. Energy prices have recovered off the lows as European leaders and Ukraine push back against the US plan, with one investor saying: “Until something concrete happens, it’s more of a knee jerk move than a structural shift.”

The Ukraine President said after talks with a top U.S. Army official on Thursday he was ready for "honest" work with Washington on a plan to end the war in Ukraine, while European allies pushed back against punishing concessions to Russia. The US is said to have given Ukraine until next Thursday Nov. 21 to decide upon the proposal.  The US has threatened to cut intelligence sharing and weapons supplies, Reuters sources say. According to the U.S.-backed plan, Kyiv would be required to give up the entire Donbas region and significantly downsize its military, conditions long seen by Ukraine's allies as tantamount to capitulation. Ukraine would make several concessions to Russia, ceding chunks of land that then will be recognized as de facto Russian by the United States and that Ukrainian forces will withdraw from some areas that they now control. The plan says that NATO would neither expand further nor station troops in Ukraine and that Russia would be reintegrated into the global economy, with the lifting of sanctions "agreed upon in phases and on a case-by-case basis." Russia would be invited to rejoin the G8 and the United States would enter into an agreement with Moscow covering energy, natural resources, infrastructure, artificial intelligence, data centers and rare earth metals extraction in the Arctic. The Kremlin said that it has not discussed the peace proposal in detail yet with US officials. (Reuters)

The sanctions against Rosneft and Lukoil begin today, which could leave nearly 48 MMBBL stranded on the water, as per Bloomberg commentary. "The market is still struggling to comprehend the short- and medium-term impact on Russian oil exports," analysts at DNB say. "Valuable data points will emerge in the coming weeks as we see where the sanctioned barrels are ending up and the U.S.'s willingness to enforce the sanctions." Oil from Lukoil share of Iraq’s West Qurna 2 field continues to flow despite the deadline for new US sanctions today. Iraqi oil company SOMO has taken over sales for the time being. (Market News)

A stronger dollar was also depressing oil prices, with the currency poised for its best week in more than a month on investor expectations that the U.S. Federal Reserve is unlikely to cut interest rates next month. One analyst said the CME FedWatch tool shows the odds of a December rate cut have been significantly reduced to 35%, down from about 90% a month ago. (Reuters)

Inflation and some of Trump’s trade tariffs have raised production costs for oil, meaning oil companies need even higher prices to make money than they did in previous industry cycles, Reuters said. Drilling and completing a shale well now costs 5%-10% more than last year. Companies now need around $70/b to maintain and grow production, executives said, as per Reuters reporting. 'Investment returns at $55 to $60 per barrel are not what they were at the same price five years ago, because the best wells have been drilled", as per one producer in the Permian Basin.

The NY Times is reporting that big companies such as Macy's and UPS that usually add help for the holiday rush are retrenching in the face of economic headwinds. Retail hires are expected to drop by as many as 175,000 this year.

The average retail diesel price in the U.S. has risen to $3.798. One month ago it was $3.621, as per AAA data. 

Energy Market Technicals

Momentum is negative for the energies. Crude oil has tested the DC chart lower bollinger band overnight.

WTI spot futures have a rollover gap on the DC chart from the December futures expiration yesterday. The gap goes from 58.80 to 58.86. Resistance lies above that at 60.46-60.51. Support is seen at 57.26-57.34. The DC chart's lower bollinger band lies at 58.02.

Natural Gas Market Overview

Natural Gas--January NG is up 3.4 cents at $4.701
NG futures are higher today with the prospect for colder weather into the Thanksgiving weekend after a warm pattern in the coming days. Ample gas in storage though tempered the rally yesterday, despite the first withdrawal of the season.

Meteorologists forecast temperatures across the country will remain warmer than normal through November 26 before turning colder than normal from November 28 to December 5. (Reuters)

The polar vortex is forecast to weaken unusually early, and that could lead to more persistent cold weather in at least parts of the U.S. in December. This could be the earliest such event in at least 27 years. Despite this overall scenario, the forecast ahead for December may be tricky.  "I expect the weather models to struggle correctly simulating how it evolves and how it will impact our weather,", as per an MIT scientist. "The key for U.S. weather impacts is that the SSW event must end up altering the Pacific jet stream...and that takes time.", said a professor of weather at the Univ. of Oklahoma. "The U.S. usually has a delay — sometimes 2 to 4 weeks (after the polar vortex weakening) — in the effects, particularly the central and eastern U.S.," he added. How long into December or the rest of winter this colder pattern may last also remains unclear, as per the Weather Channel's commentary. 

The EIA gas storage data seen Thursday showed a draw of 14 BCF, that was right in line with expectations. This leaves total storage at 3.946 TCF, which is +146 BCF/ +3.84 % versus the 5 year average, but -23 BCF/-0.58% versus last year's level.

On Thursday, LSEG forecasted demand for NG, including exports, will be 118.1 BCF/d this week and next. This is up 3.0 BCF/d total from the forecast seen the day before.

The European TTF gas futures have fallen today to the lowest spot price seen since May 16, 2024 on the back of the possible prospect for a resolution to the Ukraine conflict. The low today is Euro/Mwh 30.125 (=$10.18/MMBtu). Support comes in at Euro 29.15-29.355 level from data on the TTF DC chart from mid-May 2024. Momentum is turning downward on this selloff. One possible positive element technically for the TTF contract is the testing of the lower bollinger band that lies at 30.40.

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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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