Daily Energy Market Update October 29,2025

Liquidity’s Daily Market Overview

Energies are mixed with crude oil unchanged, RB higher, while distillates are down slightly. The API statistics were bullish with sizable drawdowns across the board.  Additionally support was seen coming from optimism over the meeting between the US & Chinese leaders to be held Thursday in Asia. The meeting will take place in the late evening hours of Wednesday along the US East Coast. The Fed meets today with a 25 basis point rate cut expected to be announced. Some market commentaries cite OPEC's intention to raise production at their upcoming meeting as limiting the upside somewhat in oil prices.

API                 Forecast        Actual
Crude oil     -0.721/+0.9     -4.02
Gasoline       -1.8/-2.1         -6.35
Distillate       -1.4/-1.9         -4.36
Cushing            n/av             +1.7
Runs             -0.8/+0.2%      n/av              

The Chinese foreign ministry said today that the meeting of the 2 leaders would "inject new momentum into the development of U.S.-China relations", adding that Beijing was ready to work together for "positive outcomes". President Trump said he expects to cut the 20 % tariff on Chinese imports tied to fentanyl precursor chemicals ahead of his scheduled summit with Xi Jinping in South Korea on Thursday. (Investing.com) 

If Fed Chair Jerome Powell signals that further cuts may be delayed or inflation remains a concern, higher real yields or a firmer dollar could dampen oil's  and precious metals appeal. (investing.com)

Indian Oil Corp. will continue to buy Russian crude but only from non-sanctioned entities, the company's finance director said Oct. 28, adding that this would help the state-run refiner meet the obligations of US and EU sanctions. "Russian crude is not sanctioned. It is the entities and the shipping lines that have come under sanctions," the finance director added. (Platts)

One of the effects of the sanctions against Russia being seen is a sharp drop in the price for the key ESPO grade of crude oil. The spot price has fallen to minus 50 cents versus ICE Brent, down from a premium of $1 just one week ago.  ESPO is favored both by China’s state-owned refiners, as well as the independent teapot refiners in China. (Bloomberg)

The U.S. has assured Germany that Rosneft Deutschland is not impacted by the latest round of sanctions, easing fears of potential disruption to three local refineries. (Market News)

On Tuesday, the CEO of Saudi state oil giant Aramco said crude oil demand was strong even before sanctions were imposed on Russian oil majors and Chinese demand was still healthy. (Reuters)  The TotalEnergies CEO  brushed off concerns of an oversupplied oil market, insisting that demand remains strong, according to Argus.

Energy Market Technicals

Technically the crude oil has positive momentum, while RB momentum is getting near overbought while HO momentum is turning downward.

Spot WTI futures see support at the overnight low at 59.64-59.70. Below that support lies at 59.00. Resistance comes in at 61.45-61.50.

Natural Gas Market Overview

Natural Gas--December NG is down 7.3 cents at $3.794
NG futures are lower as weather demand remains seasonally overall weak and as LNG feedgas volumes have been lower the past 24 hours or more due to one plant's issues. Reuters commentary cited profit taking for some of the retreat in prices seen Tuesday. Today is the last trading day for the November NG futures.

Monday's feedgas volume fell to 15.2 BCF/d, down over 2 BCF/d from the recent record levels seen, due to a near total shutdown at the Cameron LNG plant in Louisiana. Tuesday's feedgas volume rose back to 16.6 BCF/d as the Cameron plant was back to 74% of capacity, as per Celsius Energy data.

Reuters commented as to a "softer" heating demand forecast Tuesday. LSEG reduced their 2 week HDD forecast to 207 from the 214 forecast previously seen Monday. Celsius Energy sees the next 4 week GWDD's as being -2% below the historical average, which they say will see temperature driven  gas demand "suppressed" relative to seasonal averages. "The weather remains near seasonal in terms of heating degree days for the front six days, but too warm for Nov. 3-11, NatGasWeather.com said Tuesday.  "Clearly, colder trends are going to be needed if weather patterns are to be considered cold/blue enough to satisfy." (WSJ)

The arbitrage window for US LNG cargoes to the Asia is showing early signs of improvement as weaker Atlantic prices and growing Asian winter demand narrow previously unfavorable trading margins, Platts said. Japan and South Korea are rebuilding inventories ahead of winter, while Chinese state buyers have returned to the spot market anticipating a modest industrial rebound. (investing.com)

The Henry Hub next day cash was strong versus the expiring November futures mid-morning Tuesday. The cash was seen quoted $3.43/$3.47, versus Nov futures printing near $3.35. Thus the futures were at a discount after having spent the last 4 weeks trading at a premium to the cash. Is this indicating only a temporary bit of strength for the cash price? Is this a function of longs in futures being liquidated ahead of expiration? Is this an overall reflection of a weaker NG futures market --given ample storage, strong gas production and a barely seasonal weather forecast--thus keeping demand muted ??? As a colleague suggested : "Temporary cash strength over next few days is due to a cold shot over next 2-3 days. But, the forward market is taking its cues from extended more zonal moderate temps."

Technically, the December NG futures have negative momentum as they have dropped into the gap seen on the daily chart that goes down to 3.748. The December futures have been rejected from pricing over $4.00 seen in the prior week. Below that, there is near term resistance at 3.894-3.900. Support below the gap lies at 3.737-3.738 and then at 3.700-3.704.

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