Daily Energy Market Update September 16,2025

Liquidity’s Daily Market Overview

Energies are higher, but remain stuck in a tussle between increasing supply from OPEC+ and supply concerns due to attacks on Russian energy infrastructure and possible sanctions on Russian oil supply. A Federal Reserve rate cut expected this week is seen supporting energy prices as the U.S. dollar has weakened.  

Today, news was seen that Russia’s oil pipeline monopoly Transneft has warned producers they may have to cut output following Ukraine’s drone strikes on critical export ports and refineries, Reuters reports citing three industry sources. Transneft, which handles more than 80% of all oil extracted in Russia, has in recent days restricted oil firms’ ability to store oil in its pipeline system, two sources said.

The EU is preparing its 19th sanctions package on Moscow, while President Trump signaled he is ready to impose "major" sanctions on Russia if NATO allies follow suit. Such measures could target energy exports central to financing the war in Ukraine, particularly shipments to China and India. But the outlook for a looming global surplus--partly driven by OPEC+ restoring curtailed production--continues to cap further price gains.  (WSJ)

The Ukrainian military has carried out an overnight drone attack on the 140 MBPD Saratov refinery in southwestern Russia. (Quantum Commodities) Drone attacks have cut capacity at Russia’s refineries by about 300 MBD in August and so far in September, Goldman Sachs said. The bank noted that refining margins, particularly for diesel, remain firm due to the refinery outages in Russia. The bank's commentary highlights that while this has affected Russia's domestic fuel supply, it has only led to a modest reduction in overall oil production, as Asian buyers continue to import Russian crude. (WSJ)

Discounts for Iranian oil in China have widened on record stock levels at a major refining hub and as a shortage of import quotas towards year-end hindered buying by independent processors, six trade sources told Reuters. Teapot refiner demand is slowing. China has bought over 90% of Iranian oil exports in the past few years, with January-August imports at an average of 1.43 MMBPD, up 12% annually, according to estimates by tanker tracker Vortexa. But, September imports at one key port have fallen by 65% as sanctions by the US against the port have curtailed shipments. Discounts for Iranian Light crude widened to over $6 a barrel versus benchmark ICE Brent this week for October-arrival shipments, five trade sources said, compared with around $5 a barrel two weeks ago and $3 in March.

Gold extended its rally to another fresh record high, while copper prices jumped to their highest level since June 2024, as market participants geared up for a potential easing of US Federal Reserve policy. The market is now pricing in a 96% chance of a 25 basis-point rate cut this month, according to the CME Fedwatch tool. ING commentary adds that swap markets also price in at least one more cut by the end of the year, with a strong chance of a third. These expectations have pushed Treasury yields to multi-month lows and weakened the dollar index, ING adds. The Euro has risen to near a one year high versus the dollar.

Energy Market Technicals

The sideways trading pattern for the energies persists. The energies have positive momentum basis the DC charts as ULSD momentum has turned positive.

WTI spot futures see support at 62.52-62.58 and then at 61.85-61.94. Resistance is seen at 64.08-64.10 and then at 65.10-65.11.

Natural Gas Market Overview

Natural Gas-NG is up 3.3 cents
NG futures are higher being boosted by a warmer forecast that signals more cooling demand for the end of the month. NG output is lower today, although it could be revised upward later in the day.

Lower 48 natural gas demand is estimated 0.760 BCF/d higher today at 73.64 BCF/d compared to an average of 70.48 BCF/d over the previous week and the five-year seasonal average of around 66.3 BCF/d. (Market News)

U.S. domestic natural gas production is estimated down at 106 BCF/d today from 108.83 BCF/d yesterday, according to Bloomberg data.

On Monday, NGI commentary said that :" natural gas futures and cash prices trended higher through early afternoon trading amid forecasts that advertised seasonally strong cooling demand this week."  The Henry Hub next day cash price rose to $3.00 on Monday. This was up 20 cents from the price seen last Thursday. This caused the futures premium to the cash price to shrink to flat from a premium of about 16 cents seen last Thursday. Some of Monday's rally may have also been about short covering with October open interest on the CME falling by over 17,000 contracts. Some of the drop in open interest may also be about the rolling of long positions to November by the UNG fund.

Notable trades in LN NG options seen Monday on the CME included the December $2.00 puts, which traded at a price of 0.6 cents, in what open interest from the CME shows was a closing trade. Additionally, the $4.75/$6.00 call spread traded in December in a 1 by 2.5 ratio, at a cost of 6.7 cents to the $4.75 call buyer, with delta December futures sales at $3.82. Open interest data from the CME shows this to be a trade that was initiated.

Initial estimates seen for this week's EIA gas storage data are calling for a build of 79 to 80 BCF. This is versus the 5 year average build of 74 BCF and last year's build of 56 BCF. If the estimates are correct, the deficit of 38 BCF to last year's inventories will almost be eliminated. Reuters analysis of gas storage provides a similar picture: U.S. natural gas inventories show no sign of tightening despite the start up of new LNG export facilities. Inventories were 205 BCF (+7%) above the ten-year seasonal average on September 5 which was basically unchanged from a surplus of 211 BCF (+9% ) at the start of the main air conditioning season on June 1.

Technically the DC chart still shows momentum to be negative, despite the 15 cent rally in the spot futures since Friday's close. Upside resistance comes in at 3.130-3.131 and then at 3.198-3.199. Support is likely at 3.008-3.014 and then at 2.960-2.964. Worth noting is the fact that the low of the overnight session is 2.869, which occurred on the opening of the session last night; but, basically price action overnight showed prices holding near $3.00 before rallying further since then.

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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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