Daily Energy Market Update September 11,2025

Liquidity’s Daily Market Overview

Energies are lower with yesterday's DOE data disappointing and today's IEA monthly oil report raising their forecast for an oil supply surplus next year. US CPI inflation data also is weighing on prices this morning.

The IEA forecast oil supply growth of 2.7 MMBPD this year and 2.1 MMBPD in 2026. It had previously been estimating growth of 2.5 MMBPD in 2025 and 1.9 MMBPD in 2026. The IEA did raise their oil demand growth for 2025 by 60 MBPD to +740 MBPD. The 2026 oil demand growth was left unchanged at +698 MBPD. Thursday's report said global inventories will rise by an "untenable" 2.5 MMBPD on average in the second half of 2025 as supply far outstrips demand. The report suggests that supply may exceed demand by about 3.3 MMBPD next year. The forecast for oversupply for next year is up 360 MBPD from last month's forecast. Still, the IEA said, the surplus may not materialize. "There are a number of potential twists and turns ahead – including geopolitical tensions, trade policies and additional sanctions on Russia and Iran – that could yet alter market balances," it said.  China continues to stockpile crude, the IEA said, which is helping to keep Brent crude prices in backwardation.  (Reuters/Barron's/Bloomberg)

OPEC kept their oil demand growth estimates unchanged in their monthly report issued this morning. OPEC expects global oil demand to grow by 1.29 MMBPD this year and 1.38 MMBPD in 2026. OPEC said consumer spending in major economies remained resilient and, along with fiscal stimulus measures, is expected to continue supporting growth. In August, overall OPEC crude-oil production rose by 478 MBPD to 27.95 MMBPD, while the total production of OPEC+ members increased by 509 MBPD to 42.4 MMBPD. (WSJ)

The DOE data disappointed with builds across the board. The Crude oil build of 3.94 MMBBL was mostly a function of US crude oil exports dropping by over 1 MMBPD. The crude oil build was contrary to expectations in a Reuters survey of a draw of 1 MMBBL. Product demand slipped on the week, although gasoline demand for the week was better than seen in the prior 2 years. Gasoline demand fell by 609 MBPD to 8.508 MMBPD, beating the past 2 years by 30 and 201 MBPD. Distillate demand this week is 181/201 MBPD below the levels seen the past 2 years. Distillate demand fell by 391 MBPD to 3.377 MMBPD.

US CPI data just issued came in worse than expected with inflation rising. The August CPI rose by 0.4% versus expectations for a +0.2%/+0.3% reading. The year on year inflation rate was 2.9%,  which is up from July's rate of 2.7%. WTI futures fell to their low for the session on the CPI news, as an interest rate cut by the Fed is maybe less likely due to the inflation news.

Saudi Arabia's crude oil exports to China are set to surge in October after a deep cut in prices, several trade sources told Reuters on Thursday, with Aramco shipping about 1.65 MMBPD in October, compared with 1.43 MMBPD sent in September.
 
The EU is also considering listing some independent Chinese refineries in its 19th package of sanctions against Russia, EU sources told Reuters.

Reuters reports the White House is considering an EPA proposal that would require large oil refineries to cover around half or less of the 1.1 billion gallons of biofuel blending requirements waived for smaller facilities.

In the past 2 sessions, the open interest for RB on the CME has risen by nearly 22,000 contracts. The price action of the past 2 sessions suggests to us that this is more new longs than shorts. The months seeing the bulk of the increase are the November, December and January contracts.

Energy Market Technicals

The price action overall for the energies has a sideways pattern, although the WTI does show rising lows this week with the DC momentum for WTI trying to turn positive. RB momentum remans positive, while that for ULSD remains negative.

WTI spot futures see support at 62.17-62.19 and then at the recent low at 61.45. Resistance lies at 64.10-64.15 and then at 65.10-65.11.

Natural Gas Market Overview

Natural Gas --NG is down 3.0 cents
NG futures are lower now after rallying overnight as some heat set to build across the Central U.S. The sentiment seen is that the "downside in gas prices in the near term appears limited due to forecasts for warmer US weather." Wednesday's selloff was seen due to some extent to be profit taking, as well as the drop in LNG feed gas demand, which still remains subdued today.

NG slipped Wednesday with many headlines touting the weaker LNG feedgas demand, which fell to a 3 week low, with volumes under 15 BCF/d at 14.79 BCF/d, according to Market News estimates. Today Thursday, Bloomberg sees feedgas volume at 14.56 BCF/d.  August feed gas volume averaged 15.9 BCF/d. (Reuters) The large Sabine Pass LNG plant was said to be running at 69% of capacity on Wednesday. The facility has a capacity of 4.7 BCF/d; thus about 1.46 BCF/d was offline. (Celsius Energy)

Forecaster Vaisala said Wednesday that forecasts shifted warmer in the Midwest and East for September 15-19, with above normal temperatures expected in the middle of the US.  Also, forecasts shifted warmer in the East for September 20-24. 

The next day Henry Hub cash price on Wednesday was near $2.90, which was down 20 cents versus the prior day's price. This, we believe, contributed to the drop in the October futures, with the cash/futures differential widening to 11 to 15 cents favor of the futures from the prior day's flat/+5 cent futures premium.

The EIA gas storage due out today is expected to a show a build of 68 to 69 BCF as per WSJ and Bloomberg surveys. Last year saw a build of 36 BCF and the 5 year average build for the period is 56 BCF.

In LN NG options yesterday we saw the following in CME trading: In the October January calendar spread the $-1.00 / $-0.90 call spread traded for a cost of 2 cents to the $-1.00 call buyer. The open interest for these options  saw the $-1.00 call drop by 3,000 lots and the $-0.90 call increase by 3,000 lots. In the October puts, 3,000 contracts of the $2.75/$2.55 put spread traded 2.55 cents. The December  $4.75/$6.50 Call spread traded in a 1 by 2 ratio at a cost of 8.4 cents. 

Technically NG spot futures have negative momentum basis the DC chart.  Support below is seen at 2.960-2.964 and then at 2.929-2.931. Resistance lies at 3.130-3.131.

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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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