Daily Energy Market Update October 8,2025

Liquidity’s Daily Market Overview

Energy prices are higher, with Reuters news commentary citing the "restrained'  OPEC+ production increase as supporting prices. Also possibly supportive is the EU decision to end Russian oil and gas imports by 2028.

European Union countries' ambassadors on Wednesday agreed to move ahead with the bloc's plan to end Russian oil and gas imports by 2028, EU diplomats said, clearing the law's first political hurdle before governments vote on it later this month. Separately, the EU is also negotiating a new package of sanctions against Russia to ban LNG one year earlier, in January 2027. (Reuters)

The EIA, in its monthly Short Term Energy Outlook (STEO), said " We expect global oil inventories to rise through 2026, putting significant downward pressure on oil prices in the coming months. We forecast that the Brent crude oil price will fall to an average of $62/bbl in the fourth quarter of 2025 and $52/bbl in 2026." The EIA did raise their price forecast, though, for this year and next from the forecast seen last month. Brent is seen averaging $68.64 in 2025, which is 84 cents more than the estimate the EIA put out in September. The WTI average price forecast was also raised by 84 cents to $65.00.  But, the EIA said that in July, U.S. crude oil production averaged more than 13.6 MMBPD, the most in any month on record. Production in July was higher than they previously estimated. Global production growth is being led by countries outside of OPEC+, where production rises by 2.0 MMBPD in 2025 and by 0.7 MMBPD in 2026. However, they expect OPEC+ production will remain below announced targets. U.S. crude production is seen at 13.53 MMBPD in 2025. This forecast is up 90 MBPD from last month's. The EIA's 2026 production forecast was raised by 210 MBPD to 13.53 MMBPD. The EIA's global oil production forecast for this year was raised by 0.4 MMBPD to 105.9 MMBPD. The forecast for 2026's oil production was raised by 0.6 MMBPD to 107.2 MMBPD. Global demand for 2026 was kept unchanged at 105.1 MMBPD, while the forecast for 2025 demand was raised by 0.2 MMBPD to 104.8 MMBPD.

API                Forecast            Actual
Crude Oil   +0.497/+2.84      +2.78
Gasoline     -0.9/-1.28           -1.245
Distillate     -0.4/-1.2             -1.822
Cushing         n/av                  -1.152
Runs           -1.5/-2.3%            n/av
The products drew and crude oil stocks rose as the refinery maintenance season seems to be in full swing. This notion is underscored by the estimates for a steep drop in refinery capacity utilization.

Indian refiners are expected to boost oil imports from Russia in the coming months, as trade talks with Washington drag on and discounts widen.  A doubling of the discount of Russia’s flagship Urals crude grade to Dated Brent could prompt more Russian oil purchases from Indian refiners in the coming weeks. The discount of Urals to Dated Brent has widened to $2.00-$2.50 per barrel sources with knowledge of the market pricing told Bloomberg on Wednesday. The differential has now doubled compared to the $1.00 a barrel discount for Urals versus Dated Brent in July and August. Russian crude supply accounts for about a third of all crude arrivals in India. (Oil Price/ Bloomberg)

Quantum Commodities has a headline today :"US diesel exports to Europe to crash in October as arbs slam shut". Transatlantic flows of distillate fuel oil are set to reach an eight-month low in October.

Goldman Sachs said accelerating global oil inventories reinforce its view that the market remains on track for a sizeable surplus. The bank maintained its Brent forecast at $64/b for late 2025 and $56/b for 2026, noting strong supply growth. Goldman Sachs said it saw an inventory build of 1.5 MMBPD in the last quarter despite strong seasonal demand. The bank expects a surplus of 2 MMBPD over the period from Q4 2025 to Q4 2026. (Quantum Commodities/Reuters)

Energy Market Technicals

Technically momentum is positive for the energies basis the DC charts as prices are well off the lows seen last week.

WTI spot futures see support at 61.85 and then at 60.72. Resistance comes in at 63.18-63.26 and then at 64.08-64.15.

Natural Gas Market Overview

Natural Gas--NG is down 6.3 cents at $3.435.
NG futures are lower now after rallying overnight as this morning Market News commentary said that "supported by above normal demand and slightly lower domestic production" .

Tuesday's rally was seen fueled by "ebbing production, record LNG flows and now cooling forecasts for the latter half of October", as per EBW Analytics comments. Market news also cites lower production, but also adds that short covering helped fuel the rally. This is evidenced somewhat by the large drop in NG futures open interest in the October contract as per CME data. The October open interest fell by over 24,000 contracts.

US domestic natural gas production is estimated 0.306 BCF/d lower today at 106.8 BCF/d compared to an average of 108.0 BCF/d over the previous week, according to Bloomberg data.

On Tuesday, LSEG projected average gas demand in the Lower 48 states, including exports, would slide from 99.2 BCF/d this week to 97.5 BCF/d next week. These estimates were down 0.9 BCF/d total versus those seen Monday.

The Henry Hub natural gas spot price in the STEO forecast rises from just under $3.00 in September 2025 to $4.10/MMBtu in January 2026. But, the EIA's January forecast price is almost 50 cents/MMBtu lower than it was in last month’s outlook. Lower natural gas prices largely reflect their expectation that U.S. natural gas production will be higher than previously forecast. The EIA raised their end of season October 2025 storage forecast by 66 BCF to 3.978 TCF and their March 2026 forecast by 138 BCF to 1.990 TCF from their estimates of last month.  The EIA expects the US will add 5 BCF/d in LNG export capacity in 2025 and 2026. They thus see LNG export capacity increasing total LNG exports to 14.7 BCF/d in 2025 and to 16.3 BCF/d in 2026, up from 11.9 BCF/d in 2024. The EIA's STEO increased their forecast for US natural gas production this year by 0.5 BCF/d to 107.1 BCF/d and next by 1.4 BCF/d to 107.4 BCF/d.  In so doing,  the EIA reduced their price forecast for 2025 by 10 cents to $3.42 and for 2026 by 34 cents to $3.94.

European gas inventories have trended more bullish over the past 6 weeks, as per Celsius Energy analysis. At just 3,245 BCF, storage is distancing itself for the 2nd lowest level in the last 5 yrs, above only 2021. And the storage deficit versus the 5 year average has widened to -249 BCF, the largest since late August

Renewable energy sources generated more electricity than coal globally for the first time in the first half of 2025, driven by growth in China and India. (LSEG)

Technically momentum for the NG futures basis the DC chart looks to be cresting to turn lower. Resistance above lies at last week's high at 3.585 and then at 3.628-3.629. Support is seen below at 3.425-3.426 and then at 3.351-3.355.

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