Daily Energy Market Update September 12,2025

Liquidity’s Daily Market Overview

Oil prices are higher with supply disruption concerns outweighing oversupply expectations and weaker U.S. demand. Fresh headlines re sanctions this morning  lifted energy prices to their highs for the session. 

The headlines that boosted prices today reads : *US PROPOSES BROAD G-7 SANCTIONS ON RUSSIAN ENERGY TO END WAR" “Trump suggests very hard sanctions on Russia'“…”Trump mentions sanctions on banks, tariffs” (Bloomberg)

Additionally, supply disruption concerns stem from news that overnight a drone attack on Russia's northwestern port of Primorsk - one of the country's largest oil and fuel export terminals - set fire to a vessel and a pumping station on Friday, the regional governor said.  (Reuters)

Also raising supply disruption concerns is news that India's largest private port operator, Adani Group, has banned tankers sanctioned by Western countries from entering all of its ports, three sources told Reuters and documents show, potentially curbing Russian oil supplies. India is the biggest buyer of Russian seaborne oil, mostly shipped on tankers that are under sanctions by the European Union, United States and Britain. The U.K. outlined a fresh package of 100 sanctions against Russia that targets ships carrying Russian oil as well as companies supplying electronics, chemicals and explosives used to manufacture weapons. (WSJ)

The notion of weaker U.S. demand is highlighted in the fact that DOE data shows that crude inventories in PADD 3/Gulf Coast have risen by 15 MMBBL over the last eleven weeks, the fastest seasonal rise for more than two decades, and contrasting with an average draw of 15 MMBBL over the last ten years. As a result, PADD 3 crude stocks were 12 MMBBL (+5% ) above the prior ten-year seasonal average on September 5, reversing a deficit of 18 MMBBL (-7% ) on June 20. (Reuters)

Yesterday we failed to amplify that the EPA in making biofuel requirement proposals said that they are seeking to make large refiners cover about 50% or less of waived biofuel obligations, not the full 100% the biofuel industry wanted. That means less demand for RINs (about 550M gallons lost). Thus, RIN prices fell this week. Oil refiners benefit, while farm-state/biofuel groups are upset. 

The notion of excess oil supply was underscored with the IEA yesterday increasing their oversupply estimate for next year due to the return of OPEC+ supply, amid their muted demand forecast. The IEA sees an oversupply of 3.3 MMBPD in 2026.The IEA sees demand growth this year of 740 MBPD and of 698 MBPD in 2026.  OPEC, though, painted a more rosy picture for oil demand in their monthly report yesterday. OPEC sees demand growth this year of 1.29 MMBPD and in 2026 of 1.38 MMBPD.

Many commentaries we have seen in recent days speak of the same factors affecting the oil markets:" "The global oil market is caught in a “tug-of-war between increasingly bearish fundamentals and heightened geopolitical risks."  "Brent crude is essentially flat on the week, but after a volatile ride ...(which) reflects the market's ongoing struggle to balance growing surplus risks against persistent geopolitical uncertainty and resilient refined product margins." "Traders are currently balancing concerns of weak demand and a supply glut against heightened geopolitical tensions." One analyst added :" While there is a risk of a tumble in oil prices, factors such as tightness in the distillates market, sustained buying from China to fill inventories and potential sanctions on Russia and secondary sanctions on its customers are keeping the market supported."(Bloomberg). 

Additionally, supply disruption concerns stem from news that overnight a drone attack on Russia's northwestern port of Primorsk - one of the country's largest oil and fuel export terminals - set fire to a vessel and a pumping station on Friday, the regional governor said.  (Reuters)

Also raising supply disruption concerns is news that India's largest private port operator, Adani Group, has banned tankers sanctioned by Western countries from entering all of its ports, three sources told Reuters and documents show, potentially curbing Russian oil supplies. India is the biggest buyer of Russian seaborne oil, mostly shipped on tankers that are under sanctions by the European Union, United States and Britain. The U.K. outlined a fresh package of 100 sanctions against Russia that targets ships carrying Russian oil as well as companies supplying electronics, chemicals and explosives used to manufacture weapons. (WSJ)

The notion of weaker U.S. demand is highlighted in the fact that DOE data shows that crude inventories in PADD 3/Gulf Coast have risen by 15 MMBBL over the last eleven weeks, the fastest seasonal rise for more than two decades, and contrasting with an average draw of 15 MMBBL over the last ten years. As a result, PADD 3 crude stocks were 12 MMBBL (+5% ) above the prior ten-year seasonal average on September 5, reversing a deficit of 18 MMBBL (-7% ) on June 20. (Reuters)

Yesterday we failed to amplify that the EPA in making biofuel requirement proposals said that they are seeking to make large refiners cover about 50% or less of waived biofuel obligations, not the full 100% the biofuel industry wanted. That means less demand for RINs (about 550M gallons lost). Thus, RIN prices fell this week. Oil refiners benefit, while farm-state/biofuel groups are upset. 

The notion of excess oil supply was underscored with the IEA yesterday increasing their oversupply estimate for next year due to the return of OPEC+ supply, amid their muted demand forecast. The IEA sees an oversupply of 3.3 MMBPD in 2026.The IEA sees demand growth this year of 740 MBPD and of 698 MBPD in 2026.  OPEC, though, painted a more rosy picture for oil demand in their monthly report yesterday. OPEC sees demand growth this year of 1.29 MMBPD and in 2026 of 1.38 MMBPD.

Many commentaries we have seen in recent days speak of the same factors affecting the oil markets:" "The global oil market is caught in a “tug-of-war between increasingly bearish fundamentals and heightened geopolitical risks."  "Brent crude is essentially flat on the week, but after a volatile ride ...(which) reflects the market's ongoing struggle to balance growing surplus risks against persistent geopolitical uncertainty and resilient refined product margins." "Traders are currently balancing concerns of weak demand and a supply glut against heightened geopolitical tensions." One analyst added :" While there is a risk of a tumble in oil prices, factors such as tightness in the distillates market, sustained buying from China to fill inventories and potential sanctions on Russia and secondary sanctions on its customers are keeping the market supported."

Energy Market Technicals

Technicals
WTI momentum has turned positive on the DC chart. RB momentum remains positive, while ULSD momentum is negative, but looks poised to turn upward. The overall price pattern is sideways for the products this month so far. WTI has been in a sideways pattern the past 6 days, although having fallen from higher prices seen at the beginning of the month.

WTI tested the DC chart lower bollinger today. The band intersects at 61.90. Support is seen at 62.54-62.57 via the October 60 minute chart. Next support then lies at the 61.45 low of last week. Resistance lies at 64.08-64.15 and then at 65.10-65.11.

Natural Gas Market Overview

Natural Gas--NG is unchanged
NG spot futures prices are unchanged today as a slightly disappointing EIA storage number seen yesterday and a drop in feedgas volumes for LNG export seen this week weighed on prices overnight. Futures prices behind October are weaker than the spot contract today, reversing some of the weakness seen in the forward curve this week.

The EIA natural gas storage data issued Thursday saw a build of 71 BCF. Total storage thus rose to 3.343 TCF. This is +188 BCF /+5.96 % versus the 5 year average. The deficit to last year shrank to -38 BCF /-1.12 %. ING wrote that "the bigger-than-average increase was largely due to warmer weather curbing demand."

Forecaster Vaisala said Thursday that forecasts shifted warmer in the East for September 16-20, and above normal temperatures are forecast to persist throughout the country for September 21-25.  Texas is to remain on the hot side with highs in several key metro areas staying over 90 degrees over the next 7-10 days. "Power-sector demand could get a lift from high afternoon temperatures seen for Texas, with another day of light wind generation,", as per an analyst cited in WSJ commentary yesterday. 

Comments seen re the current futures pricing include :"  Shoulder Season Futures Prices Now Undervalued After Selling Pressure". "Further downside in natural gas prices in the near term appears limited due to forecasts for warmer US weather."

Technically momentum is negative. Support at the 2.93 level has been tested today with next best support seen just below 2.87. Resistance comes in at 3.062-3.065 and then at 3.130-3.131.
 

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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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