Daily Energy Market Update November 5,2025

Liquidity’s Daily Market Overview

Crude oil prices are lower today, pressured by a very large build in crude inventories seen in last night's API data. This follows yesterday's selloff that was attributed mostly to a stronger US dollar. A weaker U.S. equity market is also seen weighing on crude prices today, while the backdrop of recent weak manufacturing data from China and the U.S. is also seen as a negative, as per Reuters commentary.


API                Forecast       Actual
Crude Oil     -0.1/+0.5       +6.5
Gasoline      -0.5/-1.3       -5.653
Distillate      -1.5/-1.6       -2.459
Cushing          n/av             n/av
Runs           +0.8/+0.9%     n/av

ULSD/HO prices are said to be supported by the drawdown in inventories and by a cooler forecast for the key Northeast consuming region, as per market news commentary. The December HO/CL crack spread has risen over $43 to a further high for the contract. Market News commentary re the crack says that it is at its highest since Feb. 2024 due to strikes on Russian energy infrastructure and sanctions impacts adding to seasonal maintenance. Russia's Black Sea port of Tuapse has suspended fuel exports, while its oil refinery halted crude processing after Sunday's Ukrainian drone attacks on its infrastructure, according to two industry sources and LSEG ship tracking data, Reuters reports.

OPEC added 30 MBPD of output in October versus an increase of 330 MBPD in September as agreed OPEC+ increases were offset by declines in Nigeria, Libya and Venezuela, Reuters said.

The U.S. dollar index,  was at a three-month high, buoyed by division among the Federal Reserve board, indicating low odds for an interest rate cut in December. (Reuters)

Gunvor CEO said OPEC+ has “done a pretty good job” and doesn’t see oil prices falling into the $50s/bbl. He adds that Russian oil will continue to find its way to market despite tougher US sanctions. (Market News)

WTI futures volume was fairly low on the CME on Tuesday at 563,337 contracts, which suggests to us a lack of conviction at present as to a clear direction for the commodity.

The AAA says that the national average gasoline price at the pump in the U.S. has risen today to $3.079. This is up from the price seen one week ago of $3.038, but is below the price of one month ago of $3.134.

Energy Market Technicals

Momentum for the ULSD futures basis te DC chart is getting overbought. RB DC chart momentum is negative.

December WTI has resistance at 61.45-61.50 and then at 62.17-62.20. Support comes in at 59.64-59.70 and then at 59.00.

Natural Gas Market Overview

Natural Gas--NG is down 3.8 cents at $4.305    
NG has fallen back after making a fresh high for the recent rally on Tuesday. The market is possibly reevaluating the strength seen the past 2 days as production remains near a record--even as forecasts turned cooler yesterday, although for only a short period, while LNG demand is considered strong. 

Tuesday's rally was said to be due to  weather forecasts adding demand for next week and also due to a chillier early December outlook, as per commentary from WSJ and NGI. The Eastern half of the U.S. is set to see temperatures 10 to 20 degrees below normal next week, but as one comment reads : the event will be short-lived. Another comment calls the cold " a one off event and not a trend". Forecaster Atmospheric G2 said Tuesday that forecasts shifted colder across the southern US for November 9-13. The NOAA updated its 6-10 day temperature outlook showing much cooler temperatures on the US East Coast.

The rally in NG futures has come even as U.S. natural gas production has risen to a record level. Bloomberg data has U.S. domestic natural gas production remaining strong today at 110.97 BCF/d after reaching a record high of 111.56 BCF/d yesterday.

Technically there are a few indicators that suggest a near term peak in NG from Tuesday's activity. NG futures volume on the CME was heavy at 679,859 contracts. Open interest (OI) in NG futures on the CME fell by 19,674 in Tuesday's trading. This follows the drop of 15,919 contracts from Monday's action. We see this drop in OI as being largely a function of short covering.  The RSI indicator on the DC chart shows an overbought contract as it has risen over 70. Yesterday's RSI rose to 74, which was the highest it has been since early October 2023. Today, the RSI remains over 70. One colleague says that "overvaluations have grown", while another writes that "traders, however, caution that the market remains “stretched". " One analyst says : "  traders should expect sharp intraday swings as models adjust to evolving weather data."

The LN/ NG options on the CME saw dramatic open interest increases. The December call options open interest on the CME rose by 35,478 contracts, while that for the December puts rose by 33,599 contracts, even as the $3.00 put strike saw open interest fall by 9,441 contracts. In the December options, the $3.75/$3.50 put spread traded 3 cents in size. Among the December calls, the $4.50/$5.00 call spread traded 11.75 cents with delta futures sales at $4.35 and also traded 12.0 cents with delta futures sold at $4.37.  Also there were large trades seen in the March April one month  25/50 cent call spread option. The spread traded 3.3 and 3.5 cents. Additionally, the 25 cent call in the March April CSO traded 14.4 cents on its own. Also, notably, the February $11/$14 call spread traded in some size at prices of 1.3 to 1.7 cents. CME open interest data has this as an opening position. 

The NG spot futures continue to test the weekly continuation chart upper bollinger band that intersects at $4.210. Technically the DC chart based momentum is getting overbought for NG spot futures. Resistance lies at yesterday's high at 4.396 and then at 4.456-4.463. Support lies at 4.180-4.183 and then at 4.148-4.157.

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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