Daily Energy Market Update October 31,2025

Liquidity’s Daily Market Overview

Crude oil prices are now higher after spending much of the overnight trading lower. Crude markets have rallied due to supply risks from Venezuela amid rising tensions with the US, as per Market News commentary. Most news wires, though, are touting the fact that crude oil is headed for its third straight monthly decline. Today's pullback was attributed to expectations for OPEC+ to raise output at their Sunday meeting, even as the increase is set to be very modest. Also weighing were a firm US dollar and doubts about how much demand may rise from better US Chinese trade relations.  Weak Chinese economic data was also seen as a negative today.

The US dollar is near 3 month highs, as per Reuters reporting. ING commentary re the dollar strength reads as follows: The dollar enjoyed a second round of support yesterday as Powell's relatively hawkish press conference continued to resonate with data-starved markets, given the US government shutdown limiting economic data.

OPEC+ is set to meet Sunday with the group leaning towards a small increase of 137 MBPD. (Reuters)

China and the U.S. reached a trade truce on Thursday after months of rising tensions; but, doubts remain as to how much the truce may raise demand. CNN commentary says that many details about what was achieved remain unclear. The overall U.S. tariff rate on Chinese imports will stay at a historically high level. In particular for the energy markets, Russian oil flows to China apparently were not part of broader talks between the two leaders, thus putting into doubt some of the cessation of Russian oil flows due to US sanctions. (ING)

China’s manufacturing activity in October contracted more than expected, shrinking to the lowest level in six months, an official survey showed on Friday. The official government PMI for October came in at 49.0, missing economists’ expectations for 49.6 in a Reuters poll. The latest reading reversed the recovery in recent months, after the PMI rose to a six-month high of 49.8 in September. The country’s manufacturing activity has remained in contraction with readings below 50.0 since April. The weakness in the October PMI was attributed to an “increasingly complex international environment”, as well a slowdown in factory activity in October due to the Golden Week holidays, which occurred at the beginning of the month.  (CNBC)

Saudi Arabia is seen lowering their A-Light grade OSP to Asia for December loadings by $1.20 to $1.50, as per a Reuters survey. Reuters cites ample supplies for the drop in price, although they add that "demand to replace Russian supplies hit by Western sanctions could limit the (price) cuts." Some buyers from Japan and South Korea are said to have requested more December-loading Saudi crude, worried that near-term spot prices could rise, survey respondents added. The OSP price cuts may also be less than forecast as Saudi refinery maintenance ends, thus limiting some supply availability. The Reuters survey forecasts for lower OSP's mirror a monthly drop in cash Dubai's premium to swaps, which have averaged $1.12 per barrel so far this month, down $1.73 from September.

A Reuters survey of 36 economists and analysts has seen the Brent oil price forecast for 2025 raised by 38 cents from last month, with Brent seen averaging $67.99 in 2025. The WTI 2025 price average forecast was raised by 44 cents to $64.83. The analysts expect that the oil market will see a surplus in 2026, with estimates ranging anywhere from 0.19 to 3 MMBPD.

Today is the last trading day for the November RB & ULSD contracts, as well as the December Brent futures.

Energy Market Technicals

The energies are having inside trading days versus yesterday's price range. Momentum is negative for the crude oil and distillates, but neutral for the RB basis its December daily chart.

WTI spot futures continue to see the same support and resistance points that we have highlighted the past 2 days. Support lies at 59.64-59.70, which was tested with yesterday's low of 59.64. Below that support is seen at 59.00. Resistance above is seen at 61.45-61.50 and then at 62.17-62.20. 

Natural Gas Market Overview

Natural Gas--NG is up 16.8 cents at $4.124
A cooler forecast for November has seen the December spot NG futures rally firmly over $4. Strong LNG feed gas demand for export is also seen aiding prices the past 24 hours, as is seasonally strong demand.

Forecasts shifted cooler over the eastern half of the country for Nov. 9-13, as per Atmospheric G2's Thursday report. As one commentary reads :"colder U.S. weather forecasts and rising heating demand fueled a sharp rebound (in natural gas futures prices). The move marks a clear shift in sentiment as traders price in the start of the high-demand winter season, with technical and seasonal dynamics aligning to support further upside."

LNG terminal feedgas is today up to a new record high at 17.85 BCF/d driven by rising flows to both Cameron, Calcasieu Pass and Sabine Pass on the day. (Market News) The record high level is partially due to the fact that cooler weather is allowing LNG plants to run more efficiently and at higher feedstock volumes.

Lower 48 natural gas demand, although estimated to be 2.08 BCF/d lower today at 79.0 BCF/d, is still above the five-year seasonal average which is trending higher at around 73 BCF/d, Bloomberg shows.

The EIA gas storage data issued Thursday of a build of 74 BCF was right in line with expectations. The total amount of gas in storage rose to 3.882 TCF. This is +171 BCF/+4.61% versus the 5 year average and +29 BCF/+0.75 % versus last year's level. Early estimates for next week are for a build of 46 BCF as per Bloomberg data and +35 BCF as per Celsius Energy. Last year saw an increase of 68 BCF for the period. The 5 year average for the week is a build of 42 BCF.

Technically NG spot futures are seeing positive momentum. Today's spot futures price is the highest since June 20th, when the price reached $4.148, which we see as resistance. That resistance has been tested with a high of 4.157 this morning.  Above that resistance is seen at 4.173-4.176 from the December daily chart. Support lies at 4.001-4.006. The only negative technical factor seen is the spot futures are trading over the DC chart's upper bollinger band that intersects at $4.00. Thursday's close and today's most likely will make for a mean reversion set up, with a close over the upper bollinger band.

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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.

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