- Daily Energy Market Update
- Posts
- Daily Energy Market Update October 16, 2026
Crude was relatively quiet overnight, holding in a narrow range as the market weighed the prospect of easing Russian oil-transport restrictions against ongoing geopolitical risks. Reports that the U.S. is considering allowing certain previously sanctioned tankers to transport legally traded oil continued to weigh on sentiment, raising the prospect of increased Russian oil flows. The extent of any policy changes remains uncertain.
On Thursday, the IEA announced plans to release more than 20 million barrels of diesel, alongside the remaining oil available under its earlier emergency reserve commitment. The additional supply adds to the potential for easing product-market tightness, although concerns over disruptions to existing flows continue to offset the prospect of increased availability.
Geopolitical risks remain a key source of support. Continued attacks on commercial shipping near the Strait of Hormuz have heightened concerns over regional oil flows, while a Ukrainian drone strike on Russia's Ryazan refinery on Thursday added uncertainty to refined-product supply. A Reuters report published early Friday also highlighted continued Iranian LPG and jet fuel shipments despite the U.S. blockade, based on shipments over preceding months.
With crude holding near unchanged overnight, the market remains caught between the prospect of improved supply availability and the risk of further disruptions to Russian and Middle Eastern energy flows. Attention remains on developments surrounding Russian tanker restrictions, security around the Strait of Hormuz, and potential disruptions to energy infrastructure as the U.S. session begins.
Crude (CL1)
Crude traded in a narrow range overnight and is heading into the U.S. open near unchanged at 95.15 (6:45 a.m.). Yesterday marked the fourth consecutive session of higher highs, as crude extended its rally before stalling at resistance near the upper Bollinger Band at 98.32. Prices printed a bullish engulfing pattern, but the rally struggled to gain further traction with significant resistance at the 61.8% Fibonacci retracement at 99.15.
Momentum has moved fully into overbought territory but continues to point higher. While the underlying trend remains supportive, stretched momentum could create headwinds for further gains until momentum begins to normalize. The key test is whether crude can break through resistance at 99.15 or whether the market consolidates.
Key Levels
Resistance
98.32 — Upper Bollinger Band
99.15 — 61.8% Fibonacci retracement (September 15 high to last week’s low)
106.75 — Last week’s high
Support
93.58 — Yesterday’s low
92.57 — 20-day moving average
90.79 — 50-day moving average
Crude (CL1)
Heating Oil (HOX6)
Heating oil pulled back to its first key support at the 38.2% Fibonacci retracement at 4.7456 before bouncing, and is now trading higher on the day at 4.8564 (7:15 a.m.). In a strongly trending market, this initial Fibonacci level may prove to be the only retracement before prices make another attempt to move higher.
The broader trend remains well supported, with the key moving averages continuing to rise and maintaining a bullish alignment, with the 50-day above the 100-day and the 100-day above the 200-day.
Momentum has crossed lower while in overbought territory, suggesting prices may consolidate before retesting the double top from earlier this week at 4.9844. A break below the overnight low would weaken the near-term outlook and open the door for a test of the key 61.8% Fibonacci retracement at 4.5931, which also coincides with Monday’s low and the low for the week.
Key Levels
Resistance
4.9336 — Yesterday’s high
4.9488 — Upper Bollinger Band
4.9844 — Double top and high for the week
Support
4.7456 — 38.2% Fibonacci retracement
4.6891 — 20-day moving average
4.5931 — 61.8% Fibonacci retracement and Monday’s low
Heating Oil (HOX6)
Crude Spread (CLZ26Z27)
The spread continued its move higher overnight, extending the recovery that began on October 7 following a bullish reversal on October 6 while deeply oversold. The market has now rallied to the upper Bollinger Band at 17.72, with an overnight high of 17.63, just above the 50% Fibonacci retracement resistance. Prices printed a new high for the move overnight but have since turned lower on the session. A close below 17.36 would mark a bearish reversal for the day.
Momentum continues to move higher toward overbought territory. If the spread stalls at current resistance, momentum could turn lower, potentially opening the door for a pullback toward support at 13.40, the 50-day moving average.
The broader trend remains supportive, with the 50-day, 100-day, and 200-day moving averages stacked in bullish order and trending slightly higher. This alignment suggests that pullbacks are likely to attract buyers, although a rejection at current resistance could lead to near-term consolidation.
Key Levels
Resistance
17.72 — Upper Bollinger Band
18.66 — 61.8% Fibonacci retracement (September 15 high to yesterday’s low)
23.72 — September 15 high
Support
14.31 — 20-day moving average
13.40 — 50-day moving average
10.90 — Lower Bollinger Band
Crude Spread (CLZ26Z27)
Natural Gas (NGX6)
Natural gas traded lower overnight, testing support at the 100-day moving average at 3.170 before recovering some of its losses. Today marks the second consecutive lower high following the double top formed earlier this week, suggesting the recovery is losing momentum.
Momentum has crossed lower in overbought territory, adding to the risk of further downside. The key level to watch is 3.170, which serves as an important pivot. A decisive break below this level would open the door for a test of the 50-day moving average at 3.070.
The underlying trend remains bearish, with the key moving averages stacked lower, as the 50-day sits below the 100-day and the 100-day below the 200-day. Unless prices can reclaim overhead resistance, the recent recovery remains vulnerable to further selling.
Key Levels
Resistance
3.334 — Double top from earlier this week
3.358 — Upper Bollinger Band
3.453 — 200-day moving average
Support
3.170 — 100-day moving average and key pivot; monitor on a closing basis
3.148 — 20-day moving average
2.912 — Multiple bottom and October 2 bullish reversal bar low
Natural Gas (NGX6)
Mark Schaefer — LinkedIn
Enjoyed this article?
Subscribe to never miss an issue. Liquidity’s Daily Energy Market Updates provide a comprehensive analysis of both the fundamentals and technical factors driving energy markets.
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
Reply