Daily Energy Market Update September 4, 2025

Liquidity’s Daily Market Overview

Crude oil prices are lower on the worry over OPEC+ raising production at their upcoming meeting, even as some news sources say that no decision has yet been made. Some price pressure may be due to the API data that was somewhat bearish with a build in crude supplies, versus the forecasts for a draw. RB futures are near unchanged as the API data showed a large draw in gasoline supplies. The DOE oil data is due to be released today at Noon EDT. Recent US jobs data is seen also as a negative.


API                 Forecast        Actual
Crude Oil      -2.0/-2.6       +0.622
Gasoline       -1.1/-2.7       -4.577
Distillate      -0.6/-1.45     +3.687
Cushing           n/av           +2.063
Runs             -0.5/-1.4%      n/av

OPEC raised output by 400 MBPD a day to 28.55 MMBPD in August, according to a Bloomberg survey. The gain was roughly in line with planned output, Bloomberg reporting adds.

Over the past few months, despite the accelerating production increases, Middle Eastern oil prices have remained the strongest regional prices globally. This has bolstered the confidence of Saudi Arabia and other OPEC members to boost output, according to a Haitong Securities' report. Yet, Russian Deputy PM Novak said the eight OPEC+ members are not discussing an output hike now, according to Tass.

Soft economic data, which tends to weigh on the demand outlook for oil, also pressured prices. U.S. Labor Department data showed on Wednesday that job openings, a measure of labor market demand, fell more than expected to 7.181 million in July. Economists polled by Reuters had expected 7.378 million. The July jobs opening figure was the weakest in 10 months. (Reuters) This news comes ahead of Friday's Non Farm Payroll (NFP) data which is expected to show that 75,000 new jobs were added in August, up from July's +73,000 new jobs figure. The poor jobs picture is probably contributing to the weakness being seen today in the distillate, besides any profit taking from the recent gains seen n distillate versus crude oil and or gasoline.

Energy Market Technicals

Momentum is negative for the energies with the WTI one having turned negative with yesterday's price drop.

WTI spot futures see support at 62.18-62.25.  Resistance lies at 65.10-65.11 and then at 65.98-66.03, which is the recent high seen.

Natural Gas Market Overview

Natural Gas---NG is up 5.6 cents
NG futures are higher as production fell quite a bit yesterday and the near term weather picture has improved. The rally the past 24 hours comes even as the EIA data due out today is seen raising the 5 year average surplus. Wednesday's rally may also have been supported by short covering as CME NG open interest data shows a large decline, especially in the October contract.

The EIA gas storage data due out today at 10:30 AM EDT is seen as a build of 54 to 56 BCF as per news wire surveys. This compares to last year's build of 16 BCF and the 5 year average build of 36 BCF.

The production drops heard that boosted NG futures Wednesday's were seen due to pipeline maintenance in the Permian basin, while those in the Appalachian basin were seen as a function of very low spot cash prices, that have recently fallen to near $1.50, as per NGI reporting.  Bloomberg data seen Wednesday estimated lower 48 dry gas production at 105.82 BCF/d, down from the previous day of 108.45 BCF/d. US domestic natural gas production is estimated today at 107.16 BCF/d compared to 108 BCF/d over the previous week and the 30-day average of 109.13 BCF/d, according to BNEF.

The weather picture has improved with the Midwest teasing cooler temperatures into the weekend and parts of Texas showing above average warmth in the 10 day forecast. As one analyst comments: the bearish weather picture seen in prior days has turned more neutral. 

Open interest data from the CME shows NG futures open interest having declined by over 20,000 contracts with notable drops in the October 2025 and January 2026 contracts. Given the strong uptick in prices seen Wednesday, we take the open interest drop as being short covering.

EIA data shows wind and hydro power generation ended August at the lowest levels in the past 6 years and September has started off in the same way. But, solar and nuclear power generation have been the highest seen in the past 6 years since the latter half of August. 

Some Japanese LNG buyers have returned to the spot market, seeking additional prompt cargoes including via a swap tender, amid forecasts of prolonged heat waves in the country, Platts reports. The JKM futures for October delivery are seen near $11.225 as per CME futures data. The contract has settled into a trading range of late basically between $11.00 and $11.50/ MMbtu. In prior months much was made of a $10 price possibly bringing buyers to the market, in particular Chinese buyers, who have a domestic gas price that is below $10, thus making purchase of LNG for import disadvantageous.

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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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