Daily Energy Market Update October 2,2025

Liquidity’s Daily Market Overview

Energy prices are down further today--with WTI at its lowest price since June 2nd. RB spot futures are at their lowest since September 11 of last year. Worries over OPEC+ raising supply and the demand loss due to the US government shutdown are weighing on prices. Disappointing DOE data seen yesterday also is likely contributing to price weakness. Energy prices tried to rally overnight as the US is set to increase aid to Ukraine for its war efforts.

The DOE data disappointed as the crude oil supplies built versus the surprise draw seen the night before in the API data and gasoline supplies built by quite a bit. Gasoline supplies built by 4.125 MMBBL. This was well above the API's build of 1.3 MMBBL and the estimate for a build of less than 1 MMBBL. WSJ commentary adds that the build was the largest seen since June. Gasoline demand fell on the week by 441 MBPD to 8.518 MMBPD, which almost equals last year's demand of 8.521 MMBD and is above 2023 demand of 8.014 MMBPD. The build in crude oil stocks is a function of a slight increase in supply via net crude imports and a drop in demand as crude inputs to refineries fell. Net crude imports rose by 71 MBPD,  while crude inputs to refineries fell by 308 MBPD.  Distillate supplies rose by 0.578 MMBBL, less than the build of 3.0 MMBBL sen in the API data, but worse than the estimated draw of between 0.5 and 1.0 MMBBL. Distillate demand fell by 121 MBPD to 3.617 MMBPD, which is slightly below last year's demand for the period of 3.638 MMBPD, but lagging 2023 demand by 198 MBPD. Distillate stockpiles are currently 6 % below the 5 year average; this is down from a deficit of 23% to the 5 year average seen in early July. 

The U.S. will provide Ukraine with intelligence for long-range missile strikes on Russian energy infrastructure, two officials told Reuters on Wednesday, confirming an earlier Wall Street Journal report. This will make it easier for Ukraine to hit refineries, pipelines and other infrastructure with the aim of depriving the Kremlin of revenue and oil, the WSJ said.

The Group of Seven nations’ finance ministers said on Wednesday they will take steps to increase pressure on Russia by targeting those who are continuing to boost purchases of Russian oil and those that are facilitating circumvention.   (Reuters)

Crude loadings from three western Russian ports jumped to the highest in more than two years in September amid a surge in exports from the Black Sea, according to Bloomberg. Additionally, observed crude exports from Saudi Arabia climbed to an 18-month high in September, with deliveries to the Sumed pipeline in Egypt soaring to the highest since March 2020, Bloomberg reports.

China’s oil stocks are more likely to draw by year-end, rather than continue building, Kpler said, as rising freight and limited quotas for independent refineries will likely keep Chinese imports muted, supporting the view of further inventory draws ahead.

The EIA is continuing normal publication schedules and data collection until further notice, as per a statement from the EIA's own website Wednesday.

More of the Brent futures style margin options traded on the CME Wednesday. The trade was a purchase of the December $64 put with a .38 delta purchase of December futures at a price of $65.35. In the December LO WTI options, a fence consisting of 3,000 contracts of the $70 calls were sold against buying of 3,000 of the $55 puts at a cost of 19 cents, with .26 delta buys in December WTI futures at $61.50.

Energy Market Technicals

Momentum remains negative and is not yet oversold.

RB spot futures remain under the lower DC chart bollinger band. That band lies at 1.9106. Support is seen at 1.8606-1.8622 and then at 1.8365-1.8370, via November daily chart data. Resistance lies at 1.9070-1.9081 and then at 1.9173-1.9176.

Natural Gas Market Overview

Natural Gas --NG is up 2.4 cents at $3.500
NG prices are up again today after the 5.24% rally seen Wednesday in the spot futures. The rally was said to be a function of short covering and the addition of heating demand. Strong cash pricing at the Henry Hub has also been a catalyst for the higher prices for futures.

WSJ commentary quoted a source on Wednesday saying that :"weather models have added as much as 17 heating-degree days."  A cold front is forecast to move from the Midwest to the East, with cooler conditions late in the Oct. 6-10 period, according to Bloomberg.

Henry Hub next day cash is quoted this morning at $3.30/$3.340. This is up 17 to 19 cents from Tuesday's price and 11 to 12 cents versus yesterday's pricing. The cash futures differential today is about 12 to 16 cents with the November futures printing at $3.466 versus the 3.30/3.340 quote. The differential was at 17 cents yesterday and at 15 cents Tuesday.

Lower gas output has possibly helped fuel the rally as well. LSEG said average gas output in the Lower 48 states fell to 107.0 BCF/d so far in October, down from 107.4 BCF/d in September and a record monthly high of 108.3 BCF/d in August.

On Wednesday, LSEG projected average gas demand in the Lower 48 states, including exports, would slide from 101.4 BCF/d this week to 98.8 BCF/d next week. This week's demand estimate is down 1.5 BCF/d versus that seen last Friday.

The average amount of gas flowing to the eight big U.S. LNG export plants fell to a six-week low of 14.7 BCF/d so far in October, down from 15.8 BCF/d in September and a monthly record high of 16.0 BCF/d in April. The primary reason for the LNG export feedgas decline was a drop of 1.0 BCF/d  from Tuesday to Wednesday in gas flows to Venture Global LNG's Calcasieu plant in Louisiana. (Reuters) 

The EIA gas storage data to be released today is seen as a build of 64 to 70 BCF. This compares to last year's build of 54 BCF and the 5 year average build of 85 BCF.

Lower 48 states U.S. storage is on track to end the season at a two-year low of 3.869 TCF at the end of October, according to analyst estimates telling Reuters. The eight-year high was 3.938 TCF at the end of October 2024. The five-year average (2020-2024) is 3.782 TCF.  The EIA's September STEO projected EOS gas inventories at 3.912 TCF. Earlier in the week, we had cited NGI's model projecting an EOS storage level of 3.935 TCF, which they said was down 20 BCF versus their prior week's estimate.

Yesterday, NG Option trading centered around the Nov 4.00 calls with 15,112 done and the Nov 3.00 puts with volume of 36,026. The November LN/NG put option open interest on the CME rose by over 22,000 contracts in Wednesday's trading. Notable was the rise in the $3.00 put strike. Among trades seen in that strike was it being sold versus buying of the $4.00 call for a cost of 1.1 cents to the call buyer, with .34 delta November futures sold at $3.46. Additionally, 1.5 of the $3.00 puts were sold against buying of one of the $3.50 puts at a cost of 16.6 cents, with .26 delta November futures buys at $3.44. Thirdly, the November $3.00 put was purchased at a cost of 6.2 cents with .2 delta futures purchases at $3.35. In the January/February 1 month CSO, the 50 cent call was bought versus selling of the 75 cent call at a cost of 1.9 cents. The January February 1 month 50 cent call was also sold versus buying of the 25 cent call at a cost of 4.5 cents to the lower strike buyer. The January/February spread settled 21.5 cents Wednesday.

Momentum remains positive and not yet overbought for the NG futures basis the DC chart, that we see. Reuters commentary from Wednesday ,though, said: "the front-month is in technically overbought territory for a third day in a row for the first time since February."  The gap on the DC chart going back to the low from July 18th of 3.494 has been filled this morning. Above this resistance comes in at 3.574-3.576 and then at 3.623-3.629. Support is seen at 3.335-3.340.

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.

Click below to view our other newsletters on our website:

Ethanol Update 

Natural Gas Update

Fuel and Freight Daily Report

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