Daily Energy Market Update October 20, 2025

Liquidity’s Daily Market Overview

Energies are lower as the underlying recent themes remain--an oil supply surplus, Chinese/US trade tension , and the US government shutdown. The fall in prices today comes even as Chinese GDP data was better than expected and Russian oil supply remains at risk from possible tariffs on India by the US.

Last week, the head of the World Trade Organization said she had urged the United States and China to de-escalate trade tensions, warning that a decoupling by the world's two largest economies could reduce global economic output by 7% over the longer term. (Reuters)

Uncertainty remains over what may happen with Russian oil supply, with President Trump warning again on Sunday that Washington would maintain "massive" tariffs on India unless it stopped buying Russian oil. (Reuters) Russian oil companies are continuing to ship oil to India, according to Russia's Deputy Foreign Minister, as reported by state news agency TASS on Monday. (Investing.com)

China's GDP grew by 4.8% year-on-year in the third quarter, slowing for a second consecutive quarter from the 5.2% growth in the second quarter. Still, the economy managed to beat expectations for a steeper decline. Through the first three quarters of the year, China's economy has grown by 5.2% year on year. Thus, the economy is  still on pace to meet the government's 5% annual growth target. Industrial production grew by 6.5% year-on-year in September, faster than the 5% forecast and 5.2% growth in the prior month.  (ING/CNBC)

The malaise in the crude market is reflected in the forward curve structure with the December January WTI spread trading flat today, which is the lowest value seen since June 2nd. The notion of an oil supply surplus was at the heart of the IEA's monthly oil market report issued last week. 

Energy Market Technicals

Technically momentum basis the December daily chart for the crude oils remains negative, although it is getting oversold. The momentum for RB & ULSD looks poised to turn upward on the December daily charts.

December WTI sees resistance at 57.99-58.03 and then at 58.70-58.72. Support lies at 56.15 and then at 55.17.

Natural Gas Market Overview

Natural Gas -- November NG is up 20.4 cents at $3.212
NG futures have gapped up over the weekend as colder weather forecasts have added demand. 

Celsius Energy notes a 25 to 40 GWDD increase in the forecast seen over the weekend for the 4 week period from October 11 to November 7. They say that this amounts to a 12% increase in the GWDD forecast. The GWDD total, though, remains below the historical average for the period, Celsius adds.

The Baker Hughes gas rig count saw an increase of 1 unit in Friday's report.

In the LN/NG options on the CME, the December $4.50 call open interest rose by 17,074 contracts. One very large trade saw the call purchased at a cost of 7.1 and 7.2 cents against .19 delta sales of the December futures at $3.70.

Friday's rally in NG futures may have been somewhat a function of short covering. The pattern seen of late of the December through March strip being weaker than the spot November contract was reversed in Friday's settlements on the CME--with November up 7.0 cents, while the December through March strip rose by 9.1 to 10.7 cents.

Technically, the NG spot futures have momentum that looks poised to turn upward.  Upside resistance is seen at 3.267-3.270 for the spot futures. Above that resistance lies at 3.331-3.334. The prior resistance area at 3.130-3.133 should provide support. Below that support is seen at 3.050-3.056. The gap created over the weekend goes from 3.136 down to 3.024.

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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