Daily Energy Market Update September 29,2025

Liquidity’s Daily Market Overview

Energies are lower with OPEC+ planning another oil output hike in November. Additional price pressure is seen coming from the resumption of Iraqi crude exports through a Turkish pipeline.

The OPEC+ alliance led by Saudi Arabia is considering raising output by at least as much as the 137 MBPD hike scheduled for next month. But, “given that many producers, excluding Saudi Arabia, have essentially hit their production ceilings, future OPEC+ supply increases will be materially lower than the announced headline numbers,” analysts add.  (Bloomberg) OPEC+ is set to meet next Sunday October 5th.

In Iraq, flows via a pipeline that ships crude from the country’s northern region to a terminal in Turkey restarted in recent days after a halt of more than two years. The flow is said to be 180-190 MBD, as per Reuters reporting. The flow is expected to eventually rise to 230 MBPD.

Saudi Arabia is expected to lift November crude oil prices for Asian buyers to track gains in Middle East benchmarks. The November official selling price for flagship Arab Light crude will likely rise 20-40 cents a barrel to between $2.40 and $2.60 a barrel after sharp price cuts for October, six refining sources said in a Reuters survey. The November OSPs for other crude grades - Arab Extra Light, Arab Medium and Arab Heavy - could increase by 30-60 cents a barrel compared with October, the survey showed. Saudi Arabia is likely to avoid big price hikes as negotiations with its clients for 2026 term supply are ongoing, one of the survey respondents said, adding that a jump in freight rates has also limited refiners’ ability to pay more for crude.

The United Nations has reinstated an arms embargo and other sanctions on Iran over its nuclear programme. Tehran has warned that the measures will bring a harsh response. Britain, France and Germany initiated the return of sanctions on Iran at the U.N. Security Council over accusations that Iran had violated a 2015 deal that aimed to stop it developing a nuclear bomb. Iran denies seeking nuclear weapons. Russia has disputed the return of U.N. sanctions on Iran.  "The reimposition of U.N. sanctions is not the end of diplomacy," the foreign ministers of Britain, France and Germany said, urging Iran to "return to compliance". The sanctions do not target oil production or exports at present. (Reuters)

The arbitrage window for U.S. crude shipped to Asia is closing, Oil Price says. Higher tanker rates and cheaper Mideast crude, which takes less time to transport to Asia, are the reasons.  “With OPEC unwinding their quotas, we are seeing more cargoes in the East of the Suez,", one shipping analyst says.

Mexico's Pemex crude oil exports in August fell by 32% year-on-year. Pemex reported exports of 500.2 MBPD of crude oil in August, as its local refineries processed slightly more.  By next year, exports are forecast to drop to approximately 487.9 MBPD, and over the next decade to about 393.1 MBPD.  Crude oil and condensate production in August was 1.64 MMBPD, close to previous months, but lower than the same month last year. Mexico's President aims to raise crude oil production to 1.8 MMBPD. Pemex's own production of petroleum products was 1.07 MMBPD, up 4% y/y, but slightly lower than the 1.09 MMBPD produced in July. (Reuters)

Phillips 66 expects distillate margins to remain strong through year-end, underpinned by low inventories and seasonal demand, according to Platts. ULSD stocks are particularly tight on the U.S. Atlantic Coast, 22% below the five-year average, despite a national inventory build since July, Platts adds. Strong diesel demand for agriculture, heating and winter supply, combined with refinery maintenance and hurricane risks, is expected to sustain high ULSD crack spreads.

The Baker Hughes oil rig count showed an increase of 6 units in Friday's report.

CFTC data issued Friday showed money  managers reduced their net length in WTI and ULSD, while keeping RB basically unchanged. Net length in WTI futures/options on ICE/CME combined fell by 7,741 contracts. Quantum Commodities says that the money managers' long positioning is the lowest since 2009. ULSD net length fell by 2,543 contracts. RB net length rose by 311 contracts. The data was for the week ended Tuesday September 23.

Buoyant world stock markets ( and the energy markets) seem oblivious to the possibility that the U.S. government may be forced to shut down operations this week just as the third quarter comes to a close on Tuesday, as per Reuters commentary. The most immediate impact of a shutdown could be to postpone the release of the critical September employment report that’s due on Friday.

Energy Market Technicals

Momentum remains positive for the energies, but the ULSD has been repelled from the test of the upper bollinger band on the November daily chart the past 2 days.

ULSD resistance in the November futures lies at 2.4253-2.4279. The daily chart's upper bollinger band, which was tested the past 2 days, lies at 2.4180.  Support comes in at 2.3369-2.3380.

Natural Gas Market Overview

Natural Gas- NG is down 4.0 cents at $3.166
NG futures are lower as the overall tone still seems to be one of slack demand and ample storage. This comes even as Celsius Energy is saying that the natural gas share of the power generation stack has risen.

Due to lower wind & coal generation, the natural gas share of the power generation has rebounded and is now essentially tied with last year for the 5-year high, as per Celsius Energy analysis.

U.S. domestic natural gas production is estimated today at 108.58 BCF/d compared to the 30-day average of 108.29 BCF/d, according to Bloomberg data.

Friday's expiration of the October NG futures contract was weak, as it settled down 6.9 cents, while the November contract gained 1.1 cents on the day.

Money managers raised their net short positioning quite a bit in the week ended Tuesday September 23 as per the CFTC report seen Friday. Net shorts rose by 39,998 contracts to 63,286 contracts. Long liquidation and more so new short positons were the cause. 

The Baker Hughes rig count seen Friday showed the gas count fell by 1 unit. The gas rig count is lowest since July 18. However, it is up 18 rigs, or 18.2% on the year, as per the Baker Hughes data.

Some natural gas producers in Western Canada are aggressively cutting output in an effort to ease an ongoing glut that this week tipped prices for the fuel into record negative territory, companies and analysts said. Analysts expect prices to remain under pressure as pipelines have become congested due in part to rising output from producers in Alberta and British Columbia, which has yet to be absorbed by a new liquefied natural gas export terminal. Gas storage in Western Canada remains essentially at last year's record highs, according to U.S. investment bank Jefferies, in part due to rising output from producers in anticipation of the export terminal.  "These are the worst sustained prices we've seen, and therefore our shut-ins will be the most aggressive," one producer said. "We're trying to make sure that we shut in every penny that we can to avoid paying the market to take away our otherwise valuable energy product.", he added.  (Reuters)

Asian spot LNG prices fell last week amid lackluster demand, with pressure set to continue due as healthy inventories and stronger domestic output in China limit spot buying, Reuters said. The average LNG price for November delivery into north-east Asia was $11.20/MMBtu,  down from $11.50/ MMBtu last week, industry sources estimated. The Northeast Asian price contrasts to the TTF/European November futures price today of $11.23/ MMBtu (=32.700 Euro/Mwh). In Europe, the gradual end of the maintenance season in Norway is lifting supply while strikes in France curb LNG deliveries. For the week ahead, Kpler maintains a stable outlook for the TTF front-month contract, as ample pipeline and LNG supply should help balance a gradual decrease of renewable generation and lower Algerian piped flows to the EU. The lack of competition from Asia has reduced the urgency to procure for winter amongst European market players. 

Technically there is a large rollover gap ---down to 2.944---from the expiration of the October futures from Friday. Today, the November contract bumped up against the DC chart upper bollinger band. That band lies at 3.170. Momentum is positive basis the DC chart with the big jump in spot futures with November now the spot contract. Support for the November futures lies at 3.051-3.056 and resistance at 3.267-3.270.

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