- Daily Energy Market Update
- Posts
- Daily Energy Market Update May 28,2025
In partnership with
WTI is up 73 cents July RB is up 1.85 cents July ULSD is up 1.93 cents
Overview
Energy prices are higher today, supported by supply concerns from Venezuela and Canada. Canada is experiencing wildfires in the key producing area in Alberta. The U.S. is barring Chevron from exporting crude from Venezuela.
Bloomberg reports an Alberta wildfire near a Canadian Natural Resources Limited (CNRL) well site prompted evacuations and threatened output. CNRL is the largest producer of heavy crude oil in Canada. (Wikipedia) Oil-and-gas producer Aspenleaf Energy, which has wells in the area, evacuated its local field staff and temporarily halted operations, shutting in approximately 4,000 barrels-of-oil-equivalent per day of production. In 2023, wildfires prompted 319 MBPD of production to be shut in, while in 2016 wildfires caused 1 MMBPD to be shut in. (Reuters)
The Trump administration has issued a new authorization for Chevron that would let it keep assets in Venezuela but not export oil or expand activities, Reuters reported on Tuesday, citing sources.
When the 22-member OPEC+ group meets on Wednesday to review the market, it is not expected to change policy, the sources said. But the sources said that they expected an output hike to be agreed for July when the eight OPEC+ members meet on Saturday. (Reuters)
Iran's nuclear chief said on Wednesday it might allow the U.N. nuclear watchdog to send U.S. inspectors to visit nuclear sites if Tehran's talks with Washington succeed. (Reuters)
The June July RB spread narrowed by 1.02 cents Tuesday as we head to Friday's June contract expiration. Is the spread being pressured by the rise in refinery runs seen in recent weeks, hence more supply? Is the slower gasoline demand versus prior years seen the past few weeks in the DOE data weighing on the front end of the RB curve? And is it also possibly a function of more length in the June contract being liquidated ahead of expiration thus pressuring the spread?
WTI futures open interest on the CME rose by 23,611 contracts in the session that ended Tuesday. The increases were seen in the August 2025 and October 2025 through April 2026 contract months. We see this as mostly new shorts given the settlements and price action.
Goldman Sachs analysts see the group of eight of OPEC+ keeping production steady after the expected July output hike due to new projects entering the market later this year, slowing economic growth and a build-up of oil stocks. Goldman Sachs sees the cartel announcing one last 411,000 barrel-a-day production increase in July for two reasons. While there is a decrease in overproduction from Kazakhstan and Iraq in Goldman's preliminary May estimates, compliance improvements have been relatively moderate overall, analysts say. Equally, global oil demand remains fairly resilient and Saudi oil demand has already increased in April ahead of the spike in summer from cooling demand, Goldman says. (Reuters)
Technicals
Momentum is still negative for the energies, but the July ULSD looks to have built support as the contract has the prior 4 lows between 2.0478 and 2.0527. WTI continues to have the sideways price pattern seen over the past 2 weeks.
Below the 4 lows mentioned that we have seen in July ULSD, next support lies at 2.0392-2.0405. Resistance comes in at 2.1088-2.1104.
July RB support comes in at 2.0431-2.0453 and then at 2.0255-2.0261. Resistance lies at 2.1011-2.1020.
July WTI support is seen at 60.02-60.12 and resistance at 62.91-62.98.
Natural Gas - July NG is up 7.3 cents
NG prices are higher as the expiring June contract again is faring better than the contracts behind it as was seen in yesterday's activity. Early June cooling demand rising is seen supporting the front month. News wire stories also are touting the onset of summer and its incumbent demand overall as supporting NG prices. News wire commentary also cites lower production and "strong outflows" to Mexico as supporting the rally this morning.
The latest NOAA 6-14 forecast shows that temperatures in the East and Midwest have moved above normal.
Notable from Tuesday's settlements in NG futures on the CME is the strong performance of the spot June contract versus the months behind it. June settled up 6.4 cents, July up 1.9 cents, and August up 0.8 cents. November 2025 settled unchanged.
U.S. natural gas storage is on track to end the injection season at a three-year low of 3.79 TCF on Oct. 31, a Reuters’ survey showed. This compares with the eight-year high of 3.938 TCF at the end of summer 2024 and a five-year average of 3.782 TCF. "The Desk" survey has a forecast for end of October inventories of 3.863 TCF. The EIA in their May STEO forecast end of season storage at 3.667 TCF.
LSEG forecast average gas demand in the Lower 48, including exports, will drop from 96.8 BCF/d this week to 95.4 BCF/d next week. These forecasts are down a total of 1.3 BCF/d from those seen Friday.
Today is the last trading day for the June NG futures.
The Waha natgas price was up $3.41/MMBtu yesterday to $1.25/MMBtu, supported by higher export flows and lower Permian output. (Bloomberg)
Notable open interest changes in NG/LN options on the CME seen in Tuesday's data were in the October/January minus $1.25 put and the July $6.50 call and July $2.75 put. The October January put spread saw open interest decline with trades seen at 13.6 and 13.7 cents. The July $2.75 put open interest rose by over 12,000 contracts with trades seen at 1.2 and 1.3 cents. The July $6.50 call traded actively at 0.5 and 0.6 cents. The call also traded as a part of a spread. The $5.50 call was purchased versus selling of 3 times as many $6.50 calls with the Buyer of the $5.50 call collecting 0.2 and 0.3 cents.
TTF July futures rose yesterday to the best value for the spot contract since April 7. The recent rally has been supported by an unplanned cut to capacity at Norway’s Troll gas field, a major supplier to Europe, and amid ongoing maintenance at other Norwegian gas fields. Norway’s largest gas field Troll was forced to extend a partial outage until May 31 due to a compressor failure. (Oil Price) Bloomberg wrote of a "wind drought" in Europe that is likely also supporting the TTF contract's recent rise. Germany has just passed the least windy first quarter of its recent history. In Germany, wind power output was 30% lower in the first quarter than a year earlier. Wind speeds across Europe from February through April likely had their biggest drop from long term averages since 1940, Bloomberg writes. Gas stores are currently 45.9% full, about 22 percentage points lower than in the same period a year ago, Gas Infrastructure Europe data showed. (Reuters)
Technically though the momentum looks to have turned downward for the TTF contract in today's retreat from the high seen yesterday.
Technically July NG futures have positive momentum, though that looks to be turning neutral. The DC chart's momentum has a similar look, but will get a boost when July becomes the spot futures tomorrow given the large premium that July commands over June. July futures have support at 3.690-3.700. The overnight low is 3.705. Resistance lies at 3.840, which was almost tested with the high today of 3.832. Further resistance above lies at 3.952-3.956.
Enjoyed this article?
Subscribe to never miss an issue. Daily 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:
Learn AI in 5 minutes a day
This is the easiest way for a busy person wanting to learn AI in as little time as possible:
Sign up for The Rundown AI newsletter
They send you 5-minute email updates on the latest AI news and how to use it
You learn how to become 2x more productive by leveraging AI
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
Reply