Crude prices backed off overnight as comments out of Washington took some of the heat out of the Iran trade. WTI and Brent had a modest selloff. The market is still carrying a lot of geopolitical premium after Thursday's sharp rally.

President Trump said the U.S. is having "productive discussions" with Iran and that no attack is planned before the November 3 midterms, following reports that he was weighing military action. That calmed some of the near-term fear around strikes on Iranian energy infrastructure and export routes. He also said record volumes of crude are moving through the Strait of Hormuz, though the U.S. naval blockade of Iranian ports remains fully in place.

The dip didn't go far. Later reports said the U.S. had prepared three days of strikes on Iranian energy sites and missile and drone stockpiles, which kept buyers interested on the pullback. Iran's foreign minister was also reported to be reviewing the U.S. response to a proposal to reopen the Strait within seven days, so traders are watching for an answer either way.

Supply risks are still in the background. Washington added new sanctions on individuals, networks and 17 vessels moving Iranian oil and petrochemicals. In the U.S. Gulf of Mexico, producers have shut in a large share of offshore output ahead of Hurricane Isaias, adding another layer of near-term supply risk.

With diplomacy and strike headlines pulling in opposite directions, the overnight move looks like a modest unwind of Thursday's gains, not a change in direction. Traders will be watching the Hormuz talks, any U.S. or Iranian statements, and the pace of the Gulf restart as the session gets underway.

Crude (CL1)

Crude had a modest selloff overnight as the market digests yesterday's rally. The overnight range was a little more than $1.00, after yesterday's move of over $4.40 from low to high. So far it is posting an inside day as it comes into the U.S. open at 90.64 (6:30 am).

The 50-day moving average (88.98) is still the key support to watch on a closing basis. Momentum is pointing higher as it’s started to move out of oversold territory.

Key Levels

Resistance

• 94.10 – 20-day moving average

• 94.46 – 38.2% Fibonacci (Sept 15 high to Tuesday's low)

• 96.81 – 50% Fibonacci

Support

• 88.98 – 50-day moving average

• 86.86 – Tuesday's low

• 85.65 – 100-day moving average

Crude (CL1)

Mark Schaefer — LinkedIn

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Crude prices moved higher overnight as fresh developments in the Middle East added to concerns over regional supply and shipping disruptions. Brent made a new 5 day high and crude is approaching 93.00 (overnight high 92.82) as the market added risk premium to the ongoing geopolitical situation.

A new tanker attack in the Persian Gulf overnight, with multiple projectiles reportedly striking a vessel north of Qatar, renewed concerns over the safety of commercial shipping in the region. The latest incidents are adding pressure to an already fragile shipping environment and raising questions about the potential for further disruptions to crude flows through the Strait of Hormuz.

Geopolitical tensions also escalated overnight amid renewed concerns over potential U.S. military action against Iran. The possibility of a broader confrontation is keeping traders focused on the potential impact to Middle East production, exports and transportation infrastructure.

Additional support came from continued Houthi attacks and Saudi retaliation, further increasing concerns around regional oil infrastructure and shipping. At the same time, growing production shut-ins in the U.S. Gulf of Mexico ahead of Hurricane Isaias are adding another layer of near-term supply risk.

With several independent supply risks developing simultaneously, the overnight move higher reflects a broader increase in the market’s geopolitical and supply-risk premium. Traders will remain focused on developments around the Strait of Hormuz, U.S.-Iran tensions and the extent of Gulf production disruptions as the session gets underway.

Crude (CL1)

Crude tested downside support yesterday at the 50-day moving average (88.84) but was able to close above it. It has tested this support multiple times over the last two weeks but has not closed below it since late August, making this a key level to continue watching.

The move higher overnight pushed momentum back up from oversold territory after crude had traded sideways for more than a week. With momentum now pointing higher and crude bouncing off key support, the market looks positioned to test the upside.

Key Levels

Resistance

• 94.50/60 – 38.2% Fibonacci retracement (Sept. 15 high to Tuesday’s low) and 20-day moving average

• 96.81 – 50% Fibonacci retracement

• 99.11 – 61.8% Fibonacci retracement

Support

• 89.01 – 50-day moving average

• 86.86 – Tuesday’s low

• 85.80 – 100-day moving average

Crude (CL1)

Natural Gas (NGX26)

Natural gas gapped higher overnight before filling the gap and trading lower, with prices coming into the U.S. open at 3.253. The overall price action remains bullish after natural gas closed back above the 100-day moving average, which has been a major resistance level. The last time it closed above the 100-day was in late September, and before that, it had not closed above the level since late January.

It will be important to watch the 100-day moving average on a closing basis to see if natural gas can maintain prices above it and continue higher toward the 200-day moving average at 3.478.

Momentum has moved into neutral territory but is still pointing higher, indicating there is still room for the market to test higher.

Key Levels

Resistance

• 3.296 – Upper Bollinger Band

• 3.395 – September 24 high

• 3.478 – 200-day moving average

Support

• 3.184 – 100-day moving average

• 3.110 – Yesterday’s low

• 3.091 – 20-day moving average

Natural Gas (NGX26)

 

Mark Schaefer — LinkedIn

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Evans on Energy Weekly Update

The Geopolitical Context

Crude oil prices remain supported by a broad range of geopolitical risks with ongoing conflicts between the US and Iran, Saudi Arabia and Yemen, Ukraine and Russia.

We continue to see assessments of the recovery in global crude oil production and shipments through the Strait of Hormuz for September.  For example, the DOE Short-Term Energy Outlook estimated a 0.89 mmbpd global increase in production for the month to 101.3 mmbpd.  At the same time, they estimated global consumption at 104.2 mmbpd, implying a supply/demand deficit for the month of 2.9 mmbpd.  Of course all of these estimates are subject to later revision.  Later monthly assessments from the International Energy Agency and OPEC can also paint a different picture.

The International Energy Agency is also coordinating the announced release of 100 mmbls in crude oil and diesel reserves announced October 2 by the G7, with more details expected to follow.

Saudi Aramco officials have warned of low stock levels, including that it could take two years to replace the strategic stocks released this year.  This is in line with our own experience, but the large volumes in the current cycle mean that two years could easily stretch to three, adding to demand over the 2027-2029 period.

OPEC Developments

While OPEC and the broader OPEC+ alliance remains a key factor in regulating the physical balance in the petroleum markets over the longer term, its influence has been weakened by recent events.  The UAE quit the group in May and founding member Venezuela has signaled its willingness to withdraw in hopes of attracting fresh investment.

OPEC+ production targets were left unchanged for November, but with output constrained by war these nominal targets are less relevant to forecasting the arc of actual production.

Crude Oil

While the wider market remains driven by geopolitical risks, the US inventory included a few suprises for the week ended October 2.  In place of the expected seasonal build in crude stocks, the DOE reported a 3.2 mmbls draw as refinery runs rebounded 223,000 bpd on the week to 16.480 mmbpd and net imports declined to their lowest level since July.  At 424.1 mmbls, US commercial crude stocks remain comfortable, about 4.6 mmbls (1.1%) above their five-year average.

The uptick in refinery runs suggests at least the first wave of scheduled maintenance has peaked, but there may still be some additional work that could limit crude oil consumption over the next few weeks.  This might translate into a 2-4 mmbls build in crude stocks for the week ended October 9.  The actual data will compare with a 3.5 mmbls build in 2025 and a larger 7.1-mmbls five-year average gain.

The draw from crude stocks for last week along with the bounce in refinery runs gives WTI futures a chance to firm, reversing what has been a weakening WTI calendar spread structure and a widening discount to Brent.

Heating Oil (ULSD)

Heating oil futures have rebounded from initial weakness after the G7 announced the release of strategic diesel reserves on October 2 as the market remains tight, at least for now.

The DOE reported that US total distillate inventories (heating oil plus diesel fuel) were little changed at 105.1 mmbls as of October 2.  This was modestly bearish versus the seasonal tendency for a further decline.  The US total was still 15.7 mmbls (13.0%) below the five-year average, but this was the smallest deficit since September 18.

The data included a 0.2 mmbls draw to 21.7 mmbls in the East Coast (PADD 1) stocks more closely associated with the New York Harbor delivery point for ULSD futures.  East Coast stocks were still 10.1 mmbls (31.7%) below their five-year average, although this was the smallest deficit since August 14.

Shipments of distillate declined 298,000 bpd on the week to 3.650 mmbpd and the new four-week average implied demand of 3.769 mmbpd, a decrease of 0.62 mmbpd (1.6%) from a year earlier.  Overall, demand remains resilient in the face of record high prices, yet to collapse in any more meaningful way.

High prices are also a motivation for refiners to minimize seasonal maintenance work, but inventories remain at risk for a further decline.  For the week ended October 9 we see potential for a 1-2 mmbls draw.  The actual data will compare with a larger 4.5 mmbls drop in the same week of 2025 as well as a 2.4-mmbls five-year average decrease.

November heating oil futures have rebounded back toward the $112.50 per barrel crack spread premium over WTI crude oil from September 16.  This could still be considered part of a larger topping process, but it definitely postpones any deeper correction.

RBOB Gasoline

The US gasoline futures continue to strengthen as the product lacks the same kind of strategic reserves that may improve distillate supply in the weeks ahead.  Gasoline may have gotten a further lift from a smaller than expected 0.4 mmbls build in DOE total inventories for the week ended October 2.  The 204.7 mmbls on hand were 15.5 mmbls (7.1%) less than the five-year average, the largest such deficit since July.

The data for last week also included a larger 2.8 mmbls build in the East Coast (PADD 1) region surrounding the NY Harbor delivery point for RBOB futures.  This increase to 53.7 mmbls left East Coast gasoline stocks still 4.0 mmbls (6.9%) below their five-year average, but this was the smallest deficit since September 4, an easing of tightness on a seasonally adjusted basis.

US refinery shipments of gasoline ticked higher by 80,000 bpd to 8.769 mmbpd last week, helping sustain a similar four-week average of 8.776 mmbpd that was just 26,000 bpd (0.3%) lower than last year.  As with the distillate market, gasoline implied demand looks to be holding steady in the face of high prices.

Looking ahead to the next round of data, we see potential for a 0.5-1.5 mmbls draw from US total gasoline stocks for the week ended October 9.  The figures will compare with inventories that declined 0.3 mmbls in the same week of 2025 and fell 1.8 mmbls on average over the past five years.

November RBOB gasoline made a new high against WTI crude oil on October 1 at $50.04 per barrel and continues to trade within reach of that level.    Even at that level, gasoline may be drawing some support at a bargain compared with the price of diesel fuel.

US Natural Gas

The US natural gas market has turned higher again this week having survived a bit of a downward correction that may have only served to have confirmed buying interest just below the $3.00 mark basis nearby futures.  Deferred contracts such as January are snapping higher from the new lows reached October 2 with declining momentum that suggested the exhaustion of their downtrend phase.

Natural gas remains supported fundamentally by seasonal injections running below their five-year average rates over the past seven weeks.  After the 64 bcf build for the week ended September 25, storage of 3,415 bcf was just 79 bcf (2.4%) above the five-year average cushion.

Early estimates for the week ended October 2 point to 80-85 bcf in net injections, still less than the 96 bcf five-year average for the date.  We also expect this trend to continue in coming weeks, with storage ending the injection season close to the five-year average level.  We also note that while the end of October marks the traditional end to the injection season, the five-year average peak in storage has been the second week of November.

About:

Evans on Energy founder Tim Evans has been writing daily market commentary on crude oil, heating oil, gasoline, and US natural gas since 1995, including 17 years as the Energy Futures Analyst at Citigroup.  The report brings a fundamental perspective informed by a Penn State degree in Mineral Economics that puts recent developments within their larger historical context.

TimEvans.te59@gmail.com

Crude is relatively unchanged this morning, with WTI trading near 90.00 and Brent holding above $100 as the market balances several competing supply developments. Fresh Houthi attacks and a developing storm in the Gulf of Mexico are keeping supply risks elevated, while improving Middle East crude exports are helping limit the upside.

Middle East tensions intensified overnight. Yemen’s Houthis launched ballistic missiles and explosive-laden drones at Aden International Airport, while the Saudi-led coalition said it intercepted Houthi ballistic missiles targeting areas near Riyadh and Khamis Mushait. The Houthis also claimed attacks against Saudi airports and military facilities. Fighting has intensified near the Bab el-Mandeb Strait, a critical shipping route that has become increasingly important as disruptions through the Strait of Hormuz continue.

Weather is also moving onto the market’s radar. A developing storm in the Gulf of Mexico is forecast to become the first Atlantic hurricane of the season and could threaten U.S. offshore oil and gas production as well as Gulf Coast refining operations. Offshore areas in the storm’s projected path account for roughly 15% of U.S. crude production, while Gulf Coast states contain approximately half of U.S. refining capacity.

Offsetting those risks is a continued recovery in Middle East supply flows. Saudi Arabia has increased shipments through its East-West pipeline to roughly 5.8 million barrels per day, while Vitol estimates approximately 12 million barrels per day of crude has left the Middle East by tanker over the past 7–10 days. The improvement in physical supply is helping keep crude relatively stable despite the renewed geopolitical and weather-related risks.

For today, crude remains caught between improving physical supply and the potential for fresh disruptions. The Gulf storm track and developments surrounding the Houthis and Saudi Arabia will remain key headline risks, while the market continues to assess whether the recent recovery in Middle East exports can be sustained.

Crude (CL1)

Crude traded through the key downside support zone at 88.50 yesterday but reversed into the end of the session, closing back above support. Heading into the U.S. open (6:30 a.m.), crude is mostly unchanged at 89.90.

Momentum remains oversold but is not indicating a clear directional bias. The market appears to be at an inflection point, awaiting the next headline or catalyst to determine whether the support zone, which has held for the past three weeks, continues to hold or whether we see a clean break below and establish a new trading range.

Key Levels

Resistance

• 94.46 – 38.2% Fibonacci retracement

• 95.25 – 20-day moving average

• 96.81 – 50% Fibonacci retracement

Support

• 88.86 – 50-day moving average

• 86.86 – Yesterday's low

• 86.11 – 100-day moving average

Crude (CL1)

Natural Gas (NGX26)

Natural gas continues its move higher overnight, trading near 3.180 (7:30 a.m.) after closing yesterday at 3.117. Since posting a bullish reversal last Friday, natural gas has recorded consecutive higher highs and higher lows. It is now testing the key 100-day moving average, which has been a significant pivot level. Price briefly crossed above it in September but failed to hold. Prior to that, there had not been a close above the 100-day moving average since early February.

Momentum is pointing higher and has moved out of oversold territory. It still has room to run before reaching neutral, supporting the potential for further upside if price can establish a close above the 100-day moving average.

Key Levels

Resistance
- 3.180 – 100-day moving average (watch on a closing basis)
- 3.270 – Upper Bollinger Band
- 3.395 – Sept. 24 high

Support
- 3.070 – 20-day moving average
- 3.038 – 50-day moving average
- 2.912 – Friday’s reversal-bar low

Natural Gas (NGX26)

 

Mark Schaefer — LinkedIn

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Crude prices are trading lower this morning as the market continues to weigh improving Middle East supply flows against ongoing geopolitical and shipping risks. Recent data indicate that crude exports from the region have recovered significantly, easing some of the supply concerns that had supported prices in recent weeks. The recovery in flows, combined with additional barrels from strategic reserves, is shifting some of the market's focus back toward the physical balance.

Saudi Arabia remains an important part of the improving supply picture. Flows through the country's East-West Pipeline have increased, providing an alternative route for moving crude toward export terminals outside the Strait of Hormuz. The continued movement of Saudi barrels, along with stronger overall Gulf exports, suggests that producers are finding ways to maintain supply despite the disruptions affecting regional shipping.

The G7's decision to release additional crude and refined-product reserves is also weighing on prices. The release provides another source of near-term supply at a time when Middle East exports are recovering. However, the market remains cautious about the sustainability of these flows, particularly as security risks around the Strait of Hormuz and regional energy infrastructure remain elevated.

The market is therefore caught between improving physical supply and continued geopolitical risk. If Middle East exports continue to normalize and shipping conditions improve, some of the risk premium built into crude prices could unwind further. However, renewed disruptions to tanker movements or regional infrastructure could quickly reverse that trend and bring supply concerns back to the forefront.

Crude (CL1)

Crude oil is trading lower in overnight trading, currently at 87.43 as of 6:45 a.m., below the key 88.50 support level that had held for the past two weeks.

The overnight decline has also pushed crude below its 50-day moving average at 88.60. A close below the 50-day moving average today would be significant, marking the first daily close below the average since August 26.

Momentum has turned bearish as well. Stochastic momentum has crossed lower and is pointing down, reaching levels last seen in early August, reinforcing the downside technical bias.

Key Levels

Resistance

• 88.60 — 50-day moving average

• 94.61 — 38.2% Fibonacci retracement

• 95.47 — 20-day moving average

Support

• 86.09 — 100-day moving average

• 84.75 — Lower Bollinger Band

• 82.84 — 200-day moving average

Crude (CL1)

Mark Schaefer — LinkedIn

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Oil markets entered the new week balancing two opposing forces. On one side, there are signs that crude flows from the Middle East are recovering, with regional exports exceeding pre-war levels on several days in September. On the other, security risks around major shipping routes remain elevated, with a sharp increase in tanker incidents reported in and around the Strait of Hormuz in recent days.

The result is a market that remains highly sensitive to geopolitical developments. While physical crude availability is showing signs of improvement, transportation and logistics remain significant constraints. The market is increasingly focused not only on whether crude is being produced, but also on whether barrels can be moved safely and efficiently to refiners and end users. Higher tanker and insurance costs, along with logistical bottlenecks, remain important factors supporting oil prices despite the recovery in regional flows.

The weekend also brought an important signal from OPEC+. Seven producers agreed to keep November production targets at September levels rather than increase output further. The group reaffirmed its commitment to market stability. The decision reinforces OPEC+'s cautious approach to supply policy while geopolitical and logistical conditions remain uncertain.

At the same time, the G7's decision to coordinate the release of emergency crude and refined-product reserves through the International Energy Agency represents a significant effort to ease pressure on global energy markets. The G7 agreed to release oil stocks, including crude and diesel, with substantial diesel supplies to be front-loaded. The announcement weighed on oil prices, although continued concerns over Middle Eastern shipping and infrastructure risks remain a counterweight.

Saudi Arabia remains central to the market outlook. The country's production and export flows have been an important component of the recent recovery in Middle Eastern supply, while developments involving Saudi energy infrastructure continue to carry significant market implications. Yemen's Iran-aligned Houthis claimed an attack on an Aramco facility in Riyadh over the weekend, and smoke and fire were reported near the facility, although Saudi authorities and Aramco had not confirmed that the site had been attacked. The continued threat to Saudi energy infrastructure adds another layer of geopolitical risk to the market.

The broader market picture is therefore increasingly defined by the tension between recovering supply flows and persistent logistical and security risks. If shipping conditions continue to improve, some of the risk premium embedded in crude prices could ease. Conversely, further attacks on tankers or energy infrastructure could quickly tighten the physical market and increase volatility, even as regional crude exports recover.

For the near term, the key variables for oil markets will be the security of shipping through the Strait of Hormuz, the sustainability of Middle Eastern export flows, OPEC+ production policy, the implementation of strategic-stock releases, and the condition of regional energy infrastructure.

Overall, the market is showing signs of physical recovery, but the recovery remains fragile. The central issue has increasingly shifted from whether sufficient crude exists to whether that crude can be transported safely and reliably. Until transportation and security conditions normalize, oil markets are likely to remain highly sensitive to geopolitical headlines and vulnerable to sharp moves in either direction.

Crude (CL1)

Crude initially traded lower overnight but has since recovered and is modestly lower from Friday’s close. Price action on Friday tested the key support zone at 88.50 and quickly recovered to close above 91.00. The overnight range is within Friday’s range, creating an inside day. The overall range is about half of Friday’s.

The key moving averages (50/100/200) are stacked, with the 50 over the 100 and the 100 over the 200. This, along with Stochastic momentum crossing up from oversold, suggests potential to see a bounce from here. A break below the key support at 88.50 would challenge the technical recovery picture.

Key Levels

Resistance

• 95.20 — 38.2% Fibonacci (Sept. 15 high to Friday’s low)

• 95.86 — 20-day moving average

• 97.41 — 50% Fibonacci

Support

• 88.51 — 50-day moving average and multiple lows

• 86.25 — 100-day moving average

• 85.91 — Lower Bollinger Band

Crude (CL1)

Natural Gas (NGX26)

Nat gas initially traded lower overnight, down to 2.912, before bouncing and trading above Friday’s high. The overnight low created a double bottom at the same level as Friday’s low. Momentum is trying to cross up from oversold, and we will have to watch today’s close to see if it completes. Friday’s close was back above the 50-day moving average after three consecutive closes below it.

A momentum cross higher, combined with price holding above the 50-day moving average, will likely see upside momentum pick up. Adding to the upside momentum would be a close above the 20-day moving average at 3.059.

A close below the double bottom at 2.912 would challenge the recovery picture and open the door for a test of the lower Bollinger Band at 2.864.

Key Levels

Resistance

• 3.097 — 38.2% Fibonacci (Sept. 24 high to today’s double bottom)

• 3.154 — 50% Fibonacci

• 3.210 — 61.8% Fibonacci

Support

• 2.912 — Double bottom

• 2.895 — Group of previous lows

• 2.864 — Lower Bollinger Band

Natural Gas (NGX26)

 

Mark Schaefer — LinkedIn

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Evans on Energy Weekly Update

The Geopolitical Context

Crude oil prices remain supported by a broad range of geopolitical risks with ongoing conflicts between the US and Iran, Saudi Arabia and Yemen, Ukraine and Russia.

At the same time, overall supplies and oil shipments through the Strait of Hormuz have been recovering with recent reports that 12 mmbpd or more is flowing again, despite the occasional Iranian attack.  In fact, Kpler estimates September shipments at 16.5 mmbpd, which they observe is a match with the pre-war rate if we don’t count Iranian shipments.

While the highest level in months, shipments remain a step below the 18-19 mmbpd that shipped through the strait prior to the start of the US war with Iran.  With more oil also moving again via Saudi Arabia’s East-West Pipeline, the overall global supply/demand deficit may be more like 3-4 mmbpd.

Since March, the global market has been cushioned from the drop in supply by the release of strategic reserves, with the International Energy Agency coordinating an initial release of 400 mmbls.  On Friday, the Group of 7 (Canada, France, Germany, Italy, Japan, and the US) announced the release of additonal 100 mmbls over the next four months, with European diesel reserves expected to make up as much as half of the total.

As noted in some of our prior analysis, the release of strategic reserves adds to supply in the near term, but also creates forward demand to replenish inventories once the crisis has passed.  Normally stocks are replenished at about half the rate they’ve been released, suggesting increased demand in 2027-2028. 

OPEC Developments

While OPEC and the broader OPEC+ alliance remains a key factor in regulating the physical balance in the petroleum markets over the longer term, its influence has been weakened by recent events.  The UAE quit the group in May and founding member Venezuela has signaled its willingness to withdraw in hopes of attracting fresh investment.

OPEC+ production targets are being left unchanged for October, but with output constrained by war these nominal targets are less relevant to forecasting the arc of actual production.

Crude Oil

While the wider market remains driven by geopolitical risks, the US inventory data continues to track along typical seasonal factors, with scheduled refinery maintenance allowing crude stocks to build and refined products to draw in the week ended September 25.

Refinery crude runs declined 554,000 bpd last week to 16.257 mmbpd, the lowest weekly rate since the beginning of May.  Even so, four-week average runs of 16.996 mmbpd were still 525,000 bpd (3.2%) higher than a year ago, reflecting an effort to defer maintenance where possible in the face of what have been record crack spread margins.  Refinery runs may slip further in the near term, but we’d look for the four-week average to stabilize in the 16.0-16.2 mmbpd range as some refinery units are able to restart, even as others go offline.

The lower refinery runs along with a further 0.8 mmbls draw from the SPR allowed DOE commercial crude oil inventories to increase 0.9 mmbls on the week to 427.3 mmbls, the highest level since August 21.  Crude oil inventories were 10.8 mmbls (2.6%) higher than a year ago and 8.7 mmbls (2.1%) above the five-year average.  This was the largest year-on-five-year average surplus since April and does confirm the US market is better stocked on a seasonally adjusted basis.

The crude oil stock data included a 0.6 mmbls gain at the Cushing, Oklahoma delivery point for NYMEX WTI futures.  The new total of 24.3 mmbls was the highest since May 15, 0.8 mmbls (3.6%) more than a year ago, but still 1.3 mmbls (5.2%) below the five-year average.

In addition to the role that seasonal refinery maintenance has played in balancing the US market, we note that four-week average domestic crude oil production of 13.946 mmbpd was 451,000 bpd (3.3%) higher year-on-year.  US crude oil net imports have also rebounded from earlier in the year, with the four-week average of 2.590 mmbpd up 581,000 bpd (29%) over the same span of 2025.

Since the refinery maintnenance cycle may haver further to run, we see potential for a further 1-2 mmbls build in US commercial crude oil inventories for the week ended October 2.  This could translate into further weakness in the WTI calendar spread structure and widen the discount to Brent crude oil.  But we also see this as translating into a buying opportunity supported by a rebound in refinery rates once scheduled maintenance is completed.

In contrast with the Brent market, the US cycle of refinery maintenance and the rising US commercial crude stocks, are weakening the WTI calendar spread and widening the discount to Brent.  This relative weakness in WTI may have a few more weeks to run, but should result in a buying opportunity.

Heating Oil (ULSD)

Heating oil futures reached record valuations on the back of ongoing refinery outages in the Persian Gulf and Russia that have translated into tight inventories in the international market, as well as in the US.  However, Friday’s announced G7 plan to release up to 50 mmbls in European diesel reserves will undercut that support.  The plan takes a ban on US exports off the table.

The DOE reported a somewhat larger-than-expected 2.3 mmbls draw from US total distillate inventories for the week ended September 25, with the total of 105.2 mmbls the lowest since August 28.  Distillate inventories were 18.4 mmbls (14.9%) lower than a year ago and 16.8 mmbls (13.8%) below the five-year average.  This was the market’s largest year-on-five-year average deficit since August 21, confirming a recent tightening on a seasonally adjusted basis.

Much of the US tightness is focused in the East Coast (PADD 1) region surrounding the NY Harbor delivery point for ULSD futures, where last week’s 0.3 mmbls draw to 21.9 mmbls left inventories 8.8 mmbls (29%) lower than last year and 10.4 mmbls (32%) below the five-year average.  These tight stocks leave the market vulnerable to a renewed squeeze.

The current cycle of US refinery maintenance is limiting supply, but four-week average output of 5.184 mmbpd was 153,000 bpd (3.0%) more than a year ago, reflecting at least some response to record margins.  At the same time, we note that demand is also holding up will even at the higher price level, with US net exports averaging 1.373 mmbpd over the past four weeks, an increase of 203,000 bpd (17.4%) from a year ago.  US product shipments declined just 27,000 bpd last week to 3.948 mmbpd, helping sustain four-week average implied demand of 3.776 mmbpd that was 187,000 bpd (5.2%) more than last year.  The comparison with a weak period in 2025 may be exaggerating the strength, but it seems clear that demand is not collapsing in the face of record prices.

With refiners still in the midst of a scheduled maintenance cycle, we wouldn’t rule out a further 1-2 mmbls draw from US total distillate stocks for the week ended October 2.  The actual data will compare with a 2.0 mmbls drop in the same week of 2025 and a 1.2-mmbls five-year average decrease.

November heating oil futures that settled for as much as $112.50 per barrel over WTI on September 16 have likely topped out for now.  We see potential support in the $75-80 per barrel range.  Failed resistance in the $65 area could also potentially come back into play.  Overall, we’d suggest cashing out of heating oil long positions or even trading from the short side.

RBOB Gasoline

The US gasoline futures market got a fresh boost this week after the DOE reported a robust 1.7 mmbls draw from US total gasoline inventories for the week ended September 25.  The decline to 204.4 mmbls leaves gasoline stocks at their lowest level since 2014, down 16.3 mmbls (7.4%) from a year ago and 13.9 mmbls (6.4%) below their five-year average.  This was the largest year-on-five-year average deficit since August 28, confirming a recent tightening on a seasonally adjusted basis.

Gasoline inventories in the key East Coast (PADD 1) region surrounding the NY Harbor delivery point for RBOB futures were little changed on the week at 50.9 mmbls but remained tighter than the US average.  East Coast stocks were 5.2 mmbls (9.2%) lower than last year and 5.3 mmbls (9.4%) below the five-year average.

With heating oil crack spreads more than double the gasoline rates, refiners have been working to maximize distillate output.  Gasoline output declined 124,000 bpd last week to 9.466 mmbpd, while the four-week average of 9.502 mmbpd was 9,000 bpd (0.1%) lower than a year ago.

The flat refinery production is a near match with apparent demand that is also little changed from a year ago.  Gasoline product shipments declined 158,000 bpd in the week ended September 25 to 8.689 mmbpd, while four-week implied demand of 9.721 mmbpd was just 23,000 bpd (0.3%) more than last year.  At the margin, the US gasoline market is being supported by trade flows, with four-week average net exports of 424,000 bpd that were 84,000 bpd (25%) higher year-over-year.

Looking ahead to the next round of data, we see potential for a 0.5-1.5 mmbls recovery in US total gasoline inventories.  The actual data will compare with a 1.6 mmbls draw in the same week of 2025 but could still look supportive compared to the 2.1-mmbls five-year average gain.

November RBOB gasoline made a new high against WTI crude oil on Thursday at $50.04 per barrel and may continue to outperform as there are no strategic reserves to be released and refinery output will be limited by both the current cycle of seasonal maintenance and the greater incentive to maximize distillate production.  Gasoline may also draw some support from a market rotation away from heating oil.

US Natural Gas

The US natural gas market turned lower again over the past week, with nearby November futures failing to sustain the push to $3.317, their highest level since July, falling back beneath the $3.00 mark.

Natural gas remains supported fundamentally by seasonal injections running below their five-year average rates, with the 64 bcf build to 3,415 bcf for the week ended September 25, leaving the total just 79 bcf (2.4%) above the five-year average cushion.  This was the seventh consecutive weekly decline in the surplus to its lowest level since early April.

Early estimates for the week ended October 2 point to 80-85 bcf in net injections, still less than the 96 bcf five-year average for the date.  We also expect this trend to continue in coming weeks, with storage ending the injection season close to the five-year average level.  We also note that while the end of October marks the traditional end to the injection season, the five-year average peak in storage has been the second week of November.

The nearby November natural gas futures have left behind the $3.395 peak from September 24 as overhead resistance.  We anticipate initial selling in the $3.20 area ahead of the recent extreme.  A break of past support at $2.90 would likely produce limited follow-through in our estimation, setting up a possible buying opportunity.

The deferred contracts such as January have already posted new lows.  For that contract we’d look for a recovery above $3.85 to signal a fresh run at the $4.071 high from September 24.

About:

Evans on Energy founder Tim Evans has been writing daily market commentary on crude oil, heating oil, gasoline, and US natural gas since 1995, including 17 years as the Energy Futures Analyst at Citigroup.  The report brings a fundamental perspective informed by a Penn State degree in Mineral Economics that puts recent developments within their larger historical context.

TimEvans.te59@gmail.com

Crude is trading lower overnight as the market reassesses yesterday’s rebound, which ultimately failed to reclaim the opening level for the week. The latest pressure is being driven primarily by expectations that additional supply could become available, with European discussions around releasing diesel reserves and an additional potential 50 million-barrel crude release by IEA members easing some of the immediate concerns over tight global energy markets. At the same time, signs of recovering Middle Eastern crude flows have given the market another reason to take some supply risk out of prices.

The move lower therefore reflects a shift in the balance of near-term expectations rather than a complete change in the underlying market. Yesterday’s strength was driven by concerns over fuel availability and renewed geopolitical risk, but the inability to regain the weekly opening level left the market vulnerable when the possibility of additional supply emerged. With Middle Eastern crude exports recovering toward pre-war levels, traders are now placing greater weight on improving crude availability and the potential impact of strategic stock releases.

There are still factors that could limit how far the downside extends. The bigger issue in the energy market remains refined-product availability rather than simply crude supply. China has suspended October exports of refined products, while disruptions to refining capacity and product flows continue to constrain the diesel market. Although diesel and gasoil prices are also lower today following the reserve-release headlines, the underlying product market remains considerably tighter than the crude market.

Geopolitical risk also remains an important counterweight to the improving crude-flow story. Middle Eastern crude exports have recovered, but the broader supply situation remains vulnerable to renewed disruption as tensions with Iran continue and additional U.S. military assets are being moved toward the region. That leaves the market balancing better physical crude flows against the possibility that another escalation could quickly tighten supplies again.

Crude (CL1)

Crude’s overnight selloff held the key 88.50 support zone, which has contained larger selloffs over the past two weeks. The 50-day moving average sits at 88.47, lining up closely with the multiple lows in this area and making $88.50 an important technical pivot. A break and close below this zone would weaken the current setup and open the door for a test of the next key support at 86.33, where the 100-day moving average comes in. Crude has not closed below its 50-day moving average in more than six weeks, so this remains an important level to watch.

Momentum has crossed higher from deeply oversold territory, suggesting that downside momentum may be losing some strength and that support could hold again. For the technical picture to strengthen meaningfully, however, crude would need to reclaim 95.81 on a closing basis. A close above that level would provide greater confirmation that the recent decline has stabilized and could set the stage for a move back toward higher resistance levels.

Key Levels

Resistance

• 95.68 — 38.2% Fibonacci retracement and 20-day moving average

• 97.79 — 50% Fibonacci retracement

• 99.90 — 61.8% Fibonacci retracement

Support

• 88.50 — Key support zone / 50-day moving average at $88.47

• 86.33 — 100-day moving average

• 85.70 — Lower Bollinger Band

Crude (CL1)

Natural Gas (NGX26)

The natural gas selloff this week is continuing into Friday’s U.S. open. After making an overnight low of 2.912, just above the 2.900 double bottom, natural gas has bounced back to 2.933 as of 8:10 a.m. The bearish price action has produced lower highs, lower lows and lower closes over the past four sessions, and a close below 2.950 today would mark the fifth consecutive lower close.

Momentum has moved into oversold territory but is not yet showing a clear sign of turning higher. That keeps the short-term momentum picture bearish heading into today’s session. The 2.900 double bottom remains the key level to watch, particularly on a closing basis. A break below that area would weaken the current support structure and bring the lower Bollinger Band into focus.

Key Levels

Resistance

• 3.021 — Yesterday’s high

• 3.031 — 50-day moving average

• 3.054 — 20-day moving average

Support

• 2.900 — Double bottom / key support

• 2.850 — Lower Bollinger Band

Natural Gas (NGX26)

 

Mark Schaefer — LinkedIn

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Crude prices rallied overnight following reports that Chinese refiners suspended fuel-product exports, while stalled U.S.-Iran diplomatic talks and sharply reduced global inventories continued to support the market.

Reports that Chinese refiners suspended October exports of oil products added to concerns over an already constrained global fuel market. The move is expected to further tighten fuel supplies as Beijing looks to preserve domestic inventories.

Upward pressure was also supported by continued uncertainty surrounding U.S.-Iran negotiations. Stalled peace talks have contributed to higher oil prices, while ongoing uncertainty around Middle Eastern supply continues to keep attention focused on geopolitical risk.

Compounding these concerns are significant declines in global oil inventories. With inventories and available buffers reduced, the market remains sensitive to additional supply disruptions.

Crude (CL1)

Crude initially sold off overnight into the key support level in the 88.60–88.70 area, which has held on multiple tests over the past month. News flow then provided additional support for the technically bullish structure.

The broader technical picture remains constructive, with the 50-, 100-, and 200-day moving averages positively stacked. Momentum remains deeply oversold, but has yet to cross higher. We’re watching to see whether momentum reverses while support holds, or price breaks lower.

Key Levels

Resistance

• 95.84 — 20-day moving average

• 96.78 — Last week’s high

• 97.73 — 50% Fibonacci (September 15 high to overnight low)

Support

• 88.60 — Multiple bottoms/support

• 88.50 — 50-day moving average

• 86.50–86.90 — 50% Fibonacci and 100-day moving average

Crude (CL1)

Natural Gas (NGX26)

Natural Gas sold off overnight and is coming into the U.S. open at 2.970 as of 7:40 a.m. Yesterday marked the second consecutive daily close below the 20- and 50-day moving averages. While price remains below these averages, Natural Gas is susceptible to a test of the lower support zone, where double-bottom support comes in around 2.900.

Momentum is approaching oversold territory but continues to point lower, suggesting there is still room for price to test the lower end of the range before a potential recovery bounce develops.

Key Levels

Resistance

• 3.036 — 50-day moving average

• 3.061 — 20-day moving average

• 3.200 — 100-day moving average

Support

• 2.976 — Overnight low

• 2.948 — Last week’s low 2.948

• 2.902 — Double bottom

Natural Gas (NGX26)

 

Mark Schaefer — LinkedIn

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Crude oil prices steadied overnight following Tuesday's sharp decline as signs of recovering Middle East supply helped offset continued geopolitical uncertainty surrounding Iran and the Strait of Hormuz.

The latest indications suggest the physical supply situation has improved significantly. JPMorgan estimates the 10-day average of Middle East crude exports has recovered to 17.5 million barrels per day, or approximately 98% of pre-war levels. Saudi Arabia has also restored flows through its East-West pipeline to at least 3.5 million barrels per day, providing an alternative route that reduces reliance on the Strait of Hormuz.

Crude is also continuing to move through Hormuz despite the ongoing risks to shipping, while Goldman Sachs estimates Gulf oil exports, including so-called dark flows, have recovered to approximately 23.3 million barrels per day. Goldman estimates the global oil market was roughly balanced in September.

The improving supply picture has taken some pressure off prices, but the geopolitical risk premium remains significant. The market continues to monitor U.S.-Iran diplomatic efforts, the possibility of renewed tensions around Hormuz, and uncertainty surrounding potential U.S. restrictions on diesel exports.

In the U.S., API data reportedly showed crude inventories increasing by approximately 1.0 million barrels last week, with Cushing inventories rising by 233,000 barrels. The official EIA inventory report is due at 10:30 a.m. ET today and will be the next major catalyst for the market.

Crude (CL1)

Crude has again found support around the 88.60 area. Today marks the fifth time this month the level has been tested and held. The 50-day moving average is now holding just below support at 88.41.

Momentum remains oversold and continues to point lower, but price has yet to follow. The broader technical structure also remains constructive, with the 50-, 100-, and 200-day moving averages positively stacked. We’re watching to see whether price ultimately follows momentum lower or momentum reverses as support continues to hold. The next leg may require a fresh headline or data catalyst today. Absent that, crude could remain range bound.

Key Levels

Resistance

• 95.83 — 20-day moving average

• 96.78 — Last week’s high

• 97.73 — 50% Fibonacci (September 15 high to overnight low)

Support

• 88.60 — Multiple bottoms/support

• 88.40 — 50-day moving average

• 86.50–86.90 — 50% Fibonacci and 100-day moving average

Crude (CL1)

Natural Gas (NGX26)

Natural gas is coming into the U.S. open mostly unchanged, with a very narrow overnight range. Yesterday’s selloff pushed price through three key technical support levels: the last Fibonacci level at 3.090, the 20-day moving average at 3.070, and the 50-day moving average at 3.040.

Momentum has moved into neutral territory but continues to point lower. Natural gas would need to reclaim and close back above the 3.040 and 3.070 levels to regain the bullish momentum early last week. If price cannot reclaim these levels, natural gas could test the key support area around 2.900.

Key Levels

Resistance

• 3.040 — 50-day moving average

• 3.070 — 20-day moving average

• 3.205 — 100-day moving average

Support

• 3.000 — Yesterday’s low

• 2.976 — Last week’s low

• 2.902 — Double bottom

Natural Gas (NGX26)

 

Mark Schaefer — LinkedIn

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Crude oil prices pulled back from overnight highs Tuesday as the market weighs renewed diplomatic efforts between the U.S. and Iran against continued uncertainty surrounding the Strait of Hormuz.

U.S. and Iranian officials held separate discussions through mediators as efforts continue to reach an agreement that could lead to the reopening of the key shipping route and a resumption of broader nuclear negotiations.

Reports that the Trump administration may be open to sanctions relief and the release of frozen Iranian funds helped raise hopes for a diplomatic breakthrough. Trump, however, has denied offering Iran such concessions, leaving the outlook for an agreement uncertain.

Meanwhile, Middle East oil flows continue to recover from earlier disruptions, providing some relief to the supply outlook. The market remains focused on whether diplomatic progress can reduce the risk premium surrounding Hormuz, while any renewed tensions could quickly put upward pressure on crude prices.

U.S. inventory data will provide another near-term focus for the oil market..

Crude (CL1)

Crude has backed off yesterday’s high and is currently trading within yesterday’s range. The market appears to be at an inflection point, with price holding above its key 50-, 100-, and 200-day moving averages. Traders are waiting for the next catalyst to provide direction.

Momentum remains in oversold territory but has crossed lower after crossing higher a few days ago. With momentum still at relatively low levels, there may be room for crude to press higher as momentum moves back toward neutral.

With crude holding above its key moving averages and momentum remaining oversold, the technical bias favors a move higher.

Key Levels

Resistance

• 95.65 — 38.2% Fibonacci (September 15 high to September 22 low)

• 95.99 — 20-day moving average

• 97.77 — 50% Fibonacci

Support

• 88.67 — Double bottom from last week

• 88.36 — 50-day moving average

• 86.60 — Confluence of 100-day moving average and 61.8% Fibonacci

  Crude (CL1)

Heating Oil (HOX6)

Heating oil is under pressure heading into the U.S. open, with price currently trading below yesterday’s low at 4.4231 (7:15am). The market is approaching key support at 4.2945, which is the lower Bollinger Band, followed by the 50-day moving average at 4.2173.

Momentum is pointing lower and moving into oversold territory. However, with price still trading above the key 50-, 100-, and 200-day moving averages, the bullish price structure that has been in place since mid-July remains intact.

Key Levels

Resistance

• 4.6352 — 38.2% Fibonacci (September 15 high to last week’s low)

• 4.6633 — 20-day moving average

• 4.7144 — 50% Fibonacci

Support

• 4.3789 — Last week’s low

• 4.2945 — Lower Bollinger Band

• 4.2173 — 50-day moving average

Heating Oil (HOX6)

 

Crude Spread (CLZ6/CLZ7)

The spread is also lower heading into the U.S. open, currently trading into the previous support zone around 13.50, which held on three separate attempts over the past week. A clean break below this zone would open the door for a test of the 11.00–11.50 area, where the 50-day moving average and lower Bollinger Band come into play.

Momentum has moved into oversold territory, which could increase the potential for a bounce if we see a break lower toward the 11.50 support area.

Key Levels

Resistance

• 17.39 — 38.2% Fibonacci (September 15 high to last week’s low)

• 18.60 — Last Thursday’s high and 50% Fibonacci

• 19.81 — 61.8% Fibonacci

Support

• 11.60 — 50-day moving average

• 11.17 — Lower Bollinger Band

• 8.73 — 100-day moving average

  

  Crude Spread (CLZ6/CLZ7)

   

 

Natural Gas (NGX26)

Natural gas is lower overnight, trading around 3.107 heading into the U.S. open. This morning’s low, as well as yesterday’s low, held just above the 20-day moving average, which currently comes in at 3.0760. Today marks the second day with price action contained below the key 100-day moving average at 3.210, which natural gas broke above last week but has since moved back below.

Momentum has moved out of overbought territory but is still pointing lower. If price cannot reclaim the 100-day moving average, natural gas could test the 2.900 support area, which has held on multiple attempts over the past several weeks.

Key Levels

Resistance

• 3.210 — 100-day moving average

• 3.263 — Upper Bollinger Band

• 3.395 — Last week’s high

Support

• 3.076 — 20-day moving average (overnight and yesterday’s low)

• 3.043 — 50-day moving average

• 2.900 — Key support with multiple attempts

Natural Gas (NGX26)

 

Mark Schaefer — LinkedIn

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Evans on Energy Weekly Update

The Petroleum Markets

Geopolitical uncertainty remains the top issue for the global petroleum complex, with the US conflict with Iran still limiting tanker traffic through the Strait of Hormuz, the ongoing contest between Iranian-backed Houthi Rebels and Saudi Arabia pinching the Bab El-Mandeb strait at the southern end of the Red Sea, and Ukraine maintaining pressure on Russian oil refineries.

On Thursday, Iran made the fresh offer to reopen the Strait of Hormuz within seven days if the US released Iranian assets, with the promise of nuclear talks to follow.  The offer dangled the possibility of related price relief in time for the US mid-term elections.  However, by Saturday US President Donald Trump rejected the offer as “unacceptable.”  But on Sunday, Iranian Foreign Minister Abbas Araghchi said he was still waiting for “the definitive views to be conveyed to us through the intermediaries” rather than relying on the President’s word.

Overall, we see some ongoing chance of a diplomatic breakthrough for an updated variation on the memorandum of understanding (MOU) that failed to hold over the summer.  However, the established lack of trust on both sides suggests any deal will be fragile, at least initially.  Ongoing conflict seems more likely.

With only days left to trade, nearby November Brent futures have remained volatile within a recent $97.36-110.41 range, with the $103.89 midpoint as a defined pivot.  The substantial backwardation in the calendar spread structure suggests ample potential for the deferred contracts to step higher in the event the physical market remains tight.  Strong crack spreads also support solid ongoing refinery demand for crude oil.

Crude Oil

WTI crude oil futures continue to track closely with the international Brent benchmark and thus remains driven primarily by the day-to-day fluctuations in the perceived geopolitical risks to supply.  In contrast, the US physical crude oil market has remained well stocked as the result of refinery efforts to support high operating rates in response to record margins.

After the 3.0 mmbls build in the week ended September 18, commercial inventories of 426.4 mmbls were 11.6 mmbls (2.8%) higher than a year ago and 7.2 mmbls (1.7%) above the five-year average, the largest year-on-five-year average surplus since April.

Refinery crude runs declined 519,000 bpd last week to 16.811 mmbpd, as scheduled seasonal maintenance resulted in the lowest level since May.  Even so, the four-week average runs of 17.306 mmbpd were 659,000 bpd (4.0%) higher than last year, illustrating the overall response to record margins on a seasonally adjusted basis. Over the next 8 weeks we anticipate a further decline in runs to perhaps the 16.0-16.2 mmbpd level, which may take some pressure off inventories.

Looking ahead to the data for the week ending September 25 we see a further 1-2 mmbls build in US commercial crude stocks as likely.  The actual result will compare with a 1.8 mmbls gain in the same week of 2025 and a 0.6-mmbls five-year average draw, so we anticipate little fresh pressure on prices in either direction.

Thursday’s $96.78 high in nearby November WTI futures looks like a pivotal resistance level, with a move above that point setting up a review of $101.69 high trade from September 15.  Last week’s $88.67 low trade from September 22 looks increasingly important as technical support.

Heating Oil (ULSD)

Heating oil prices have eased from record levels as the market evaluates the odds of a potential US ban on distillate exports.  As part of a similar discussion, India has opted to honor existing export contracts rather than ban them in defense of the domestic market.  As we’ve noted, US four-week average net exports of distillates of 1.435 mmbpd were 269,000 bpd (23%) higher than a year ago, so blocking this flow would have a definite impact on US marginal supply and prices.

After a 0.4 mmbls draw for the week ended September 18, DOE total distillate inventories of 107.4 mmbls as of September 18 were 14.6 mmbls (12.7%) lower year-on-year and 15.8 mmbls (12.8%) below the five-year average. With US refiners conducting seasonal maintenance, we think the data for the week ending September 25 could show a 1-2 mmbls draw, similar to the 1.2-mmbls five-year average decrease.

The November edition of the heating oil crack spread premium over WTI crude oil that settled for as much as $112.50 per barrel on September 16 closed at $95.00 on Friday.  We expect heating oil to remain highly volatile at what have been unprecedented levels.  After failing to sustain record valuations, we can’t rule out a deeper correction.

RBOB Gasoline

The gasoline futures softened further in Friday trade, with the November RBOB crack spread premium over WTI that settled at $48.14 on Wednesday ending the week at $41.47 per barrel.  Even so, this was a significant step up from the $34.63 level from September 14.

Seasonal factors may dominate the US gasoline market, with softer demand following the summer driving season tending to be offset by lower refinery production due to scheduled maintenance.  Inventories typically chop sideways to lower, with the five-year average bottoming out in November.

The DOE reported a 1.7 mmbls decline in US total gasoline inventories for the week ended September 18.  At 206.0 mmbls, the total was 10.5 mmbls (4.9%) lower than last year and 12.9 mmbls (5.9%) below the five-year average, both larger deficits than the week before.

Looking ahead to the next round of figures, we see potential for a further 0.5-1.5 mmbls draw, comparable to the 0.8-mmbls five-year average decrease, as scheduled refinery maintenance may continue to offset softer seasonal demand.

In terms of technical support, gasoline prices may also attract buying interest as a rotation away from the heating oil, given its more conservative relative valuation.

US Natural Gas

The US natural gas futures market scored a clear breakout to the upside last week as nearby futures jumped above the $3.00 mark for the first time since July as storage rose less than the five-year average for a sixth consecutive week.  Total storage of 3,351 bcf was still 95 bcf (2.9%) above the five-year average, but this was the smallest surplus since April 3.

Storage refills are expected to continue lagging the five-year average in the weeks ahead, even as modest shoulder seasonal demand allows more robust injections.  For the week ended September 25 we put the consensus expectation at 66-67 bcf in net injections, still less than the 80 bcf five-year average gain.  Near-average storage may not seem particularly bullish, but the declining surplus still confirms the market is trending at least somewhat tighter on a seasonally adjusted basis.

Nearby October natural gas futures have now cleared the $3.00 level by a sufficient margin that this failed resistance level should now offer support.  Weekly highs from June and July in the $3.35-3.40 range will be the next hurdle for the market.

December natural gas left behind Thursday’s $3.709 high as technical resistance.  We anticipate support in the $3.45-3.50 area, well ahead of the $3.342 low trade from September 21.

About:

Evans on Energy founder Tim Evans has been writing daily market commentary on crude oil, heating oil, gasoline, and US natural gas since 1995, including 17 years as the Energy Futures Analyst at Citigroup.  The report brings a fundamental perspective informed by a Penn State degree in Mineral Economics that puts recent developments within their larger historical context.

TimEvans.te59@gmail.com

Oil is trading higher this morning as the market rebuilds a geopolitical risk premium after President Trump rejected Iran’s latest peace proposal. The decision has reduced expectations for a quick resolution to the conflict and a full reopening of the Strait of Hormuz, keeping traders focused on the risk of further disruption.

The move higher comes despite improving physical flows from the Middle East. Regional exports have recovered as Saudi Arabia and the UAE increase shipments, while traffic through Hormuz has also improved. However, the market remains cautious about treating that recovery as permanent while the broader conflict remains unresolved.

For traders, the key issue is now the durability of the supply recovery versus the risk of renewed disruption. Further U.S.-Iran discussions are expected this week, making diplomatic headlines an important near-term driver. Any sign of progress could pressure the geopolitical premium, while renewed tensions would likely keep upside risks elevated.

Refined products remain another area of concern. Diesel markets are particularly tight, while discussion around possible U.S. export restrictions is adding further uncertainty to global product supply. This means the market is dealing with both geopolitical risk in crude and continued stress in refined products.

The focus today is therefore less on the improving export data and more on whether diplomacy can produce a credible path toward sustained normalization of shipping through Hormuz. Until there is clearer evidence of that, oil is likely to remain highly sensitive to headlines from Washington, Tehran and the Gulf.

Crude (CL1)

Despite the pullback in crude on Friday, price held the weekly double bottom at 88.67, as well as Thursday’s low, maintaining the bullish price structure. The overnight bounce pushed price back above the 20-day moving average, which currently comes in at 95.84.

Momentum has crossed back up from oversold territory, suggesting there may be further room for the move to extend higher.

Key Levels

Resistance
- 97.78 — 50% Fibonacci (September 15 high to last week’s low)
- 99.90 — 61.8% Fibonacci
- 106.75 — September 15 high

Support
- 95.85 — 20-day moving average
- 88.67 — Weekly double bottom
- 88.23 — 50-day moving average

Crude (Cont Contract)

Heating Oil (HOX6)

Heating oil made a new two-week low on Friday before recovering to close above the weekly low. Price maintained its bullish structure, holding above the key moving averages. The moving-average setup also continues to support the strength of the broader trend, with the 50-day MA above the 100-day MA and the 100-day MA above the 200-day MA.

Stochastic momentum pulled back toward neutral territory at the end of last week, suggesting there is currently no clear directional bias from momentum.

Key Levels

Resistance
- 4.7134 — 50% Fibonacci (September 16 high to Friday’s low)
- 4.7927 — 61.8% Fibonacci
- 5.0499 — September 15 high

Support
- 4.3789 — Last week’s low
- 4.2737 — 50-day moving average
- 4.2052 — Lower Bollinger Band

Heating Oil (HOX26)

 

Crude Spread (CLZ6/CLZ7)

The spread gapped higher on the overnight open and, after a small pullback, is now trading back above Friday’s high at 17.38 as of 7:15 a.m. Despite Friday’s pullback, the spread maintained its bullish price structure, holding above the double bottom at 13.47 from earlier in the week.

Momentum crossed higher near the Stochastic oversold area, adding to the bullish undertone and suggesting the move may have further room to extend.

Key Levels

Resistance
- 17.39 — 38.2% Fibonacci (September 15 high to last week’s low)
- 18.60 — Confluence of last week’s high and 50% Fibonacci
- 19.80 — 61.8% Fibonacci

Support
- 14.10 Friday's low
- 13.47 Double bottom last week
- 11.51 50 day moving average

Crude Spread (CLZ6/CLZ7)

 

 

Natural Gas (NGX26)

Nat Gas gapped lower overnight, opening at 3.148 after closing at 3.251 on Friday. The move took price back below the 100-day moving average at 3.213 after closing above it on Thursday and Friday for the first time since early 2026. This level should continue to act as an important pivot for natural gas.

Friday marked the fourth consecutive day that price closed above the upper Bollinger Band, making today’s move more significant if we see a close back inside the bands and below the 100-day moving average. A close below both would suggest the recent rally is losing momentum.

Momentum crossed lower from overbought territory following the two-day selloff, suggesting there could be further weakness before momentum reaches neutral territory.

Key Levels

Resistance
- 3.213 — 100-day moving average
- 3.259 — Upper Bollinger Band
- 3.395 — Thursday’s high

Support
- 3.073 — 20-day moving average
- 3.042 — 50-day moving average
- 2.976 — Last Monday’s low (low before the strong rally)

Natural Gas (NGX26)

 

Mark Schaefer — LinkedIn

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The Geopolitical Context

Crude oil prices have surged to their highest level since May as escalating conflicts in the Middle East are putting increased pressure on dwindling inventories.  Over the past week, the US and Iran have traded attacks on tankers in the Strait of Hormuz, adding a further obstacle to a negotiated cease-fire, let alone a lasting peace deal.

The brewing war between Saudi Arabia and the Iranian-backed Houthi rebels in Yemen also saw escalation, including attacks on oil facilities in southern Saudi Arabia.  The Houthis have also reportedly taken control of the port city of Mokha, obtaining closer access to the Meb al-Mandeb strait controlling shipping through the southern end of the Red Sea.

As one measure of the impact of the regional unrest on oil supplies, Saudi Arabia reported to OPEC that it’s oil production fell 1.9 mmbpd to average 6.238 mmbpd during August, the lowest monthly figure since 1990.  We note this is even lower than the OPEC estimated Saudi supply to the market of 7.122 mmbpd.

On Friday, it was also reported that Saudi Arabia shut its East-West Pipeline to move crude oil to the Red Sea after an attack that was launched from inside Iraq, possibly broadening the conflict that much further.  The Iraqi government has denied involvement and is investigating, but the presence of a militia group with this kind of regional reach is troubling, nonetheless.

OPEC Developments

While OPEC and the broader OPEC+ alliance remains a key factor in regulating the physical balance in the petroleum markets over the longer term, its influence has been weakened by recent events.  The UAE quit the group in May and founding member Venezuela has signaled its willingness to withdraw in hopes of attracting fresh investment.

OPEC+ production targets are being left unchanged for October, but with output constrained by war these nominal targets are less relevant to forecasting the arc of actual production.

On Thursday, OPEC also released its Monthly Oil Market Report including its latest demand assessment.  Despite the higher prices, global petroleum demand is still seen increasing 0.4 mmbpd in 2026, with offtake next year seen growing 2.4 mmbpd.  The forecast also serves as a reminder that second half offtake is seasonally stronger than over the first six months of the year.

Crude Oil

While the geopolitical risks may be keeping pressure on global inventories, US total petroleum inventories edged higher last week, possibly reflecting a stronger effort to hold on to the stocks necessary to maintain supplies.

On the crude oil side, supplies included the latest release of 1.2 mmbls from the Strategic Petroleum Reserve to 285.4 mmbls, the lowest level since 1982.  This brings the cumulative release since March to 130.1 mmbls (31%).  The flow from the SPR helped limit the draw from US commercial crude stocks to just 0.4 mmbls to 424.1 mmbls, just 0.6 mmbls (0.1%) less than a year ago.  Commercial crude stocks were also 2.7 mmbls (0.6%) above the five-year average.

The data for last week included a 0.7 mmbls decrease at the Cushing, Oklahoma delivery point for WTI futures.  Cushing inventories of 21.8 mmbls were still a step above the July lows but remain tight, down 2.0 mmbls (8.5%) from a year earlier and 6.0 mmbls (21.6%) below the five-year average.  These were both expanded deficits compared with the week before.

In our view, refiners are working to maintain normal working inventories to support strong refinery runs in an era of record crack spread margins.  For the week ended September 4, crude runs increased 90,000 bpd to 17.586 mmbpd.  This helped sustain a four-week average of 17.468 mmbpd that was 524,000 bpd (3.1%) higher than a year ago. 

Even with record margins, refiners will need to perform at least some cycle of scheduled seasonal work over the next eight weeks or so.  At the same time, we expect refiners will defer any work that can be deferred, and to minimize downtime.  Even so, we’d expect four-week average crude runs to fall to perhaps 16.2 mmbpd by the end of October, even as this would mark a significant year-on-year increase.

The next round of data for the week ending September 11 will span the Labor Day holiday, which can distort trade flows and refinery shipments of product.  Overall, we’d look for commercial crude stocks to be little changed for a second week, with product inventories showing a further short-term build.

Overall, the surge in crude oil futures prices to the highest level since May looks well supported by the ongoing geopolitical risks to supply.  The market may now be short-term overbought, but we’re not yet seeing a loss of momentum that would signal vulnerability to a technical correction.

Friday’s pullback from a new high for nearby November Brent of $110.41 set at least interim technical resistance at that level, with any break beneath the $103.48 low representing a daily reversal.  But we would look for additional support associated with failed resistance in the $98-102 zone.

For nearby October WTI, Friday’s $98.48-104.46 range will be pivotal and we see additional support in the $93-95 area.  Scanning the forward market suggests there may be relative bargains out the curve.  With October settling Friday at $100.05, November was $95.94, December was $91.43, and January settled at $87.68 per barrel.

Heating Oil (ULSD)

Heating oil prices remain the strongest component of the global petroleum complex despite a weekly uptick in US total distillate inventories.  DOE distillate stocks increased 2.1 mmbls in the week ended September 4 to 106.3 mmbls, their highest level since August 7.  Even so, inventories were also still tight, off 14.4 mmbls (11.9%) from a year ago and 14.3 mmbls (11.8%) below their five-year average.  The year-on-five-year average deficit was the smallest since July 31.

The build for last week was focused in the East Coast (PADD 1) inventories surrounding the NY Harbor delivery point for NYMEX ULSD futures, where stocks rose 2.4 mmbls to 21.7 mmbls.  While this narrowed the gap with historical levels, East Coast stocks were still 8.6 mmbls (28%) less than a year ago and 11.0 mmbls (34%) below their five-year average. 

With nearby futures and retail prices alike surging to record levels, demand is under pressure but showing only a moderate decline.  Distillate product supplied increased 288,000 bpd last week to 3.678 mmbpd, helping sustain a four-week average of 3.715 mmbpd that was just 98,000 bpd (2.6%) lower year on year.

Given that refiners routinely cut back on shipping schedules over the Labor Day holiday, we see potential for a further 1-2 mmbls build in DOE distillate stocks for the week ended September 11.  Any relief may be temporary, however, as seasonal refinery maintenance will reduce supply over the next 8 weeks or so, typically resulting in new lows in distillate inventories.

Nearby ULSD futures have set new records with a surge beyond the $5 mark that has also resulted in a record October heat crack spread of more than $110 per barrel.  These elevated levels in a thinly traded element of the market carry significant risk of a volatile technical correction.  Cutting back on position size or rolling forward into more moderately priced contracts may help to adjust for this possibility.

RBOB Gasoline

The US gasoline market is lagging a bit behind the gains across the rest of the petroleum complex now that the traditional summer driving season has ended and DOE total gasoline inventories rose by 1.3 mmbls for the week ended September 4 to 206.9 mmbls, the highest level since August 14.  Although far less tight than the distillate inventories, gasoline inventories were still 13.1 mmbls (5.9%) lower than a year ago and 10.5 mmbls (4.8%) below their five-year average.  This was the smallest year-on-five-year average deficit since May 29, and so easing tightness is the larger theme.

The East Coast (PADD 1) inventories surrounding the NY Harbor delivery point for NYMEX RBOB futures shared in the larger pattern, with a 0.4 mmbls increase to 53.0 mmbls.  At that level, East Coast stocks were 2.7 mmbls (4.8%) lower than last year and 2.5 mmbls (4.5%) below their five-year average.  As with the overall US figures, this reflected an easing tightness on a seasonally adjusted basis.

Soft apparent demand is behind the easing, with refinery shipments declining 371,000 bpd last week to 8.551 mmbpd, the lowest figure since February.  Four-week average shipments implied demand of 8.801 mmbpd, a rate 126,000 bpd (1.4%) lower than over the same span of 2025.

Apparent demand is likely to remain soft in the next round of data as refiners typically cut back on shipping schedules over the Labor Day holiday.  We think this might allow a further 1-2 mmbls build in US gasoline inventories for the week ended September 11.  The comparable five-year average result is a 1.1 mmbls gain.

While demand will be seasonally weaker in the months ahead, we note that scheduled refinery maintenance will result in lower production.  As a result, gasoline inventories typically hit their lows for the year in November, then rebuild easily once refinery turnarounds have been completed and production ramps back up.

With the October gasoline crack spread oscillating in the $38-42 range, the market seems to be taking its cues from the upstream WTI crude oil direction more than from the direct gasoline data and we’d expect that behavior to continue.  As with other elements of the market, we note forward values are at least somewhat lower, offering a somewhat different risk/reward profile.

US Natural Gas

The US natural gas market continues to express its characteristic independence, both from the petroleum market and the international price of natural gas.  Storage levels and US weather patterns remain the dominant factors with seasonality coming into sharper focus.

Thursday’s DOE storage report for the week ended September 4 added 40 bcf to working gas in storage to 3,254 bcf, a level 79 bcf (2.4%) less than a year ago but 148 bcf (4.8%) above the five-year average for the date.  This was the smallest year-on-five-year average surplus since May 29, extending the larger firming trend of the past month.

As an early estimate, data for the week ended September 11 is seen featuring a further 45-50 bcf net injection.  Anything less than the five-year average 74 bcf build will extend the recent firming of the market on a seasonally adjusted basis.

Storage will also be trending higher seasonally through the end of October, with the DOE Short-Term Energy Outlook projecting a peak of 3,969 bcf, about 5% above the five-year average level.  It’s worth noting that while the end of October marks the traditional end of the storage injection season, the actual peak may be slightly higher and somewhat later.  For example, the five-year average peak will arrive November 13.  A later peak effectively shortens the withdrawal season.

Nearby natural gas prices have turned lower this week after probing above the $3.00 mark, leaving behind a high of $3.026 as technical resistance.  This consigns the market to further base building above both the $2.622 low from August 2025 and the $2.495 low from March.

As we’ve been noting, the winter months trading at higher levels carry a different risk/reward profile.  December futures continue to grind lower to new lows near the bottom of their established declining price channel.  December trading $3.40 or January at $3.80 may continue to slip.

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. Evans on Energy 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 solely those of the analyst.

About: 

Evans on Energy founder Tim Evans has been writing daily market commentary on crude oil, heating oil, gasoline, and US natural gas since 1995, including 17 years as the Energy Futures Analyst at Citigroup.  The report brings a fundamental perspective informed by a Penn State degree in Mineral Economics that puts recent developments within their larger historical context. 

TimEvans.te59@gmail.com

Oil moved sharply higher overnight after Saudi Arabia shut its East-West crude pipeline following multiple attacks, removing a key route for moving Saudi barrels toward the Red Sea while bypassing the Strait of Hormuz. Brent traded as high as $108 a barrel before easing slightly, while WTI touched $103 before also pulling back from its high. The shutdown added a fresh physical-supply concern to an already disrupted regional market.

The move was reinforced by the postponement of a planned meeting between Iran and Gulf states over a temporary shipping arrangement through Hormuz. With the pipeline still offline and no immediate diplomatic progress on shipping, traders were left with less confidence around near-term supply flows on two separate fronts.

The Saudi outage carries particular weight because the East-West system is one of the few alternative routes that lets Saudi crude avoid Hormuz exposure entirely. With that option temporarily off the table, more of the kingdom's export flow effectively falls back onto the same chokepoint already under scrutiny — which is why the market responded by adding premium to prompt barrels rather than treating this as a one-off disruption.

For today, the focus is on how quickly Saudi Arabia can restore the pipeline and maintain export flows while it remains offline. Any evidence of a prolonged outage would keep pressure on prompt crude, while signs of restored flows could take some of the overnight premium back out of the market.

Taken together, the pipeline shutdown and the setback to Hormuz shipping talks left the market pricing in greater uncertainty over crude availability and movement. Brent is holding just below its overnight high near $108, with WTI near $103, as traders assess how long the disruption will last.

Crude (CL1)

Crude gapped higher overnight, reaching a high of 103.83 before pulling back toward its opening price. At 7:15 a.m., crude was trading at 102.78, up 2.71. Despite the overnight move, price remains within Friday’s range, creating an inside day.

Momentum is overbought and beginning to cross to the downside. Following Friday’s reversal and close back below the upper Bollinger Band, the setup suggests some caution around chasing the overnight strength.

Key Levels

Resistance
- 103.83 — Overnight high
- 104.46 — Friday’s reversal bar high

Support
- 102.14 — Upper Bollinger Band
- 92.83 — 38.2% Fibonacci retracement from the August low to Friday’s high
- 89.28 — 50% Fibonacci retracement

Crude (CL1)

Heating Oil (HOV6)

Heating Oil also gapped higher overnight, trading up to 5.1392 before pulling back to 5.0689. Despite the move overnight, heating oil is still contained within Friday's range — an inside day. The bearish divergence from last week, coupled with momentum having crossed over to the downside, suggests that heating oil may retrace lower before it can determine the next move direction.

Key Levels

Resistance
- 5.0769 Upper Bollinger Band
- 5.1664 Friday's high

Support
- 4.4974 20 day moving average
- 4.4338 September 4th low
- 4.0823 50 day moving average

Heating Oil (HOV6)

 

Crude Spread (CLZ6/CLZ7)

The spread is up 2.23 overnight at 21.55. Price is contained within Friday's range and currently trading just above the upper Bollinger Band. The overnight range was small relative to Thursday and Friday's strong moves.

Momentum crossed down on Friday from overbought and suggests further rallies may struggle to make new highs before we see momentum normalize.

Key Levels

Resistance
- 23.32 Friday's reversal bar high

Support
- 21.37 Upper Bollinger Band
- 18.97 Friday's low

Crude Spread (CLZ6/CLZ7)

 

 

Natural Gas (NGV26)

Natural Gas is up 0.07 at 2.902 overnight. The move took it back above key resistance, breaking over the 20 day moving average (2.862) and the 50 day moving average (2.866). Both of these moving averages have acted as pivots recently.

Momentum moved out of overbought at the end of last week and is close to neutral levels.

Key Levels

Resistance
- 2.989 Upper Bollinger Band
- 3.033 100 day moving average

Support
- 2.866 50 day moving average
- 2.862 20 day moving average
- 2.736 Lower Bollinger Band

Natural Gas (NGV26)

 

Mark Schaefer — LinkedIn

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Ethanol Update 

Natural Gas Update

Fuel and Freight Daily Report

Oil prices have pulled back from yesterday’s sharp rally, with U.S. crude slipping back below $100 while Brent remains above that level. The pullback follows reports of diplomatic efforts to establish a temporary arrangement for shipping through the Strait of Hormuz, taking some of the immediate geopolitical premium out of crude.

The more important development is the continued strength in refined products. U.S. diesel prices reached a record $6.0556 per gallon, while the global middle-distillate market continues to tighten as Middle Eastern and Russian supply remains disrupted. Diesel is showing greater upside pressure than crude as Gulf shipping constraints and Russian refinery outages continue to affect supply.

The physical market remains tight. The IEA said global inventories fell by 3.1 million barrels per day in August and expects global oil supply to decline by 5.7 million barrels per day in 2026, while demand is projected to fall by 2.5 million barrels per day.

For traders, the key takeaway is that the pullback in crude has not been matched by relief in the product markets. If that divergence persists, it would suggest the market is increasingly pricing actual supply constraints in refined products rather than simply carrying a geopolitical risk premium in crude.

Crude (CL1)

Crude sold off overnight, trading back below $100. It is down $3.53 at $99.00 as of 6:45 a.m. The market gapped higher overnight, making a new high of $104.46 before reversing sharply. While the selloff was significant, crude is still maintaining its pattern of higher highs and higher lows, with the broader short-term trend remaining intact as long as price holds above $95.37.

Momentum is still pointing higher. It will likely take more than one day of selling, or even several sessions of stable prices, for momentum to begin turning lower from overbought levels.

Key Levels

Resistance

• 104.46 — Overnight high

• 99.73 — Upper Bollinger Band

Support

• 92.83 — 38.2% Fibonacci retracement (August low to overnight high)

• 88.72 — Last week’s low

• 88.48 — 20-day moving average

Crude (CL1)

Natural Gas (NGV26)

Natural gas had a relatively quiet overnight. Price was limited to trading inside of yesterday's range while starting in the US down 0.031 at 2.802. Yesterday there was a bullish reversal candle, but with momentum being in the overbought zone and turning lower, there is much less significance to the reversal candle. Key to watch from here is the pivot level above (20 day moving average at 2.855) and then the 50 day moving average, which are converging.

Momentum is crossed over and pointing down while still in overbought zone.

Key Levels

Resistance

• 2.855 20 day moving average

• 2.870 50 day moving average

• 2.987 Upper Bollinger Band

Support

• 2.753 Yesterday's reversal bar low

• 2.723 Lower Bollinger Band

• 2.668 Double bottom

Natural Gas (NGV26)

 

Mark Schaefer — LinkedIn

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Ethanol Update 

Natural Gas Update

Fuel and Freight Daily Report

Oil is back above $100 a barrel as the escalation between the U.S. and Iran raises fresh concerns about disruptions to Middle East energy flows. But the bigger story is what is happening underneath the headline price: the market is increasingly concerned about whether crude can actually move through the region reliably, particularly through the Strait of Hormuz.

The physical market is starting to reinforce that concern. Crude differentials have strengthened and inventories have continued to decline, while the amount of oil sitting on tankers has fallen significantly since the middle of July. The barrels are still there, but the challenge is getting them to the right place. That is becoming increasingly important as the conflict raises the risk of further disruptions to regional exports.

Shipping has become one of the clearest signs of the stress in the market. Tanker rates have surged as operators face higher risks and are being forced to take longer, more expensive routes. The cost of moving crude from the Middle East to Asia has reached extraordinary levels, while U.S. Gulf-to-Asia freight costs have also jumped sharply. In other words, the market is not simply paying more for oil—it is paying much more to move it.

The futures curve is telling a similar story. Both Brent and WTI spreads have strengthened significantly, with the market placing a much higher premium on prompt barrels. That is an important distinction from a purely geopolitical price spike. When the physical market, freight market and forward curve are all tightening at the same time, it suggests the market is dealing with a genuine supply and logistics constraint.

China is also becoming more supportive for crude prices as its buying activity picks up after a period of weaker demand. At the same time, refined products—particularly diesel—remain under pressure. Global diesel supplies are tight, Russian exports have fallen sharply, and U.S. inventories are expected to decline further. That creates an additional source of pressure on the broader energy complex and raises the risk that higher energy costs begin feeding more directly into inflation.

For now, the key question is how long the disruption lasts. If crude continues to move through Hormuz, the market may be able to manage the situation despite the higher cost and risk. But a more serious restriction on flows would put further pressure on both crude and products. For traders, the focus should be on physical flows, tanker activity, Chinese buying and inventory data—not just whether Brent is above or below $100.

Crude (CL1)

Crude is up $4.06 this morning after gaining approximately 1.70 earlier in the session. Buying accelerated over the past hour, with crude jumping more than 2.00 and breaking through the key 98.30 61.8% Fibonacci resistance, followed by the psychological 100.00 level. Price has now pushed to a high of 100.88, confirming the strength of the current move and putting the next major resistance near 109.24 in focus.

Momentum is deep into overbought territory but continues to point higher. Despite the extreme move, there is not yet a clear momentum reversal, suggesting the upside trend remains intact.

Key Levels

Resistance

• 100.88 — High this morning

• 109.24 — Gap from mid-May

Support

• 98.30 — Key 61.8% Fibonacci level, previously resistance

• 97.42 — Upper Bollinger Band

• 87.47 — 20-day moving average

Crude (CL1)

Mark Schaefer — LinkedIn

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Natural Gas Update

Fuel and Freight Daily Report

Crude is pressing higher this morning as the latest escalation between the U.S. and Iran adds further risk to an already disrupted physical market. The U.S. military said it destroyed five Iranian oil tankers after attempted Iranian attacks on a U.S. Navy warship. Iran subsequently claimed attacks on U.S. military assets and commercial vessels, although those claims have not been independently confirmed. Brent has moved back above $100, while U.S. crude is trading in the mid-$90s.

The bigger story for physical traders remains shipping. Preliminary Kpler data showed six commodity vessels passed through the Strait of Hormuz on Tuesday, below the 10-day average of about 12. That figure excludes vessels with their AIS transponders switched off, so it should not be viewed as total traffic. The key takeaway is that visible commercial traffic remains limited, while uncertainty around actual flows remains high.

The disruption is also extending beyond Hormuz. Iran-backed Houthi forces have carried out attacks on Saudi energy infrastructure, adding another layer of risk to regional crude and product logistics. With Hormuz already constrained, any further disruption to alternative shipping routes would add pressure to an already stressed physical market.

For products, this is particularly important. Refined fuels have been under more pressure than crude, and further disruption to Gulf or Red Sea logistics could put additional pressure on diesel and other middle distillates. The question is whether physical conditions continue to tighten enough to support higher prices, or whether shipping visibility begins to improve.

For traders, the focus today is less on the $100 headline and more on the barrels. I’m watching Hormuz traffic, tanker movements, product cracks and any evidence that the latest escalation is translating into additional physical supply losses.

Crude (CL1)

Crude continues to press higher toward $100, coming into the U.S. open up 2.05 at $95.08 at 7:00 a.m. The market continues to make higher highs and higher lows, with price trading at its highest level in roughly three months. The focus now turns to the $98.30 61.8% Fibonacci retracement, followed by the key psychological $100 level.

Momentum remains overbought but is still pointing higher. That said, technical signals are likely to carry less weight while geopolitical tensions remain elevated and continue to drive the market.

Key Levels

Resistance

• $97.00 — June 3 high

• $98.30 — 61.8% Fibonacci retracement

• $100.00 — Key psychological level

Support

• $94.53 — Upper Bollinger Band

• $86.71 — 100-day moving average

• $86.57 — 20-day moving average

Crude (CL1)

Heating Oil (HOV6)

Heating oil gapped higher overnight and is coming into the U.S. open at 4.7298, just off the overnight high of 4.7470. Price remains below last week's bearish reversal-bar high, keeping that setup intact for now. A move above 4.7661 would negate the bearish reversal setup.

Momentum remains overbought but is still pointing higher. The bearish divergence, combined with last week's bearish reversal, suggests the move is stretched. However, with geopolitical tensions continuing to escalate and energy prices pushing higher, the key question is whether heating oil can continue to press higher despite the overbought technical picture.

For now, the market is holding above the key support levels, while the overnight high and last week's reversal-bar high remain the levels to watch on the upside. A break above 4.7661 would shift the technical picture and invalidate the bearish reversal setup.

Key Levels

Resistance

• 4.7589 — Upper Bollinger Band

• 4.7661 — Last week's reversal-bar high

Support

• 4.4338 — Friday low / pivot level

• 4.3637 — 20-day moving average

Heating Oil (HOV6)

 

Crude Spread (CLZ6/CLZ7)

The spread is up 1.51 overnight at 16.95. It gapped higher on the open and has made both another higher high and a higher low. Price is holding close to the overnight high of 17.09, with little retracement so far.

Momentum is pressing above the highs from late August and continues to point higher, reinforcing the strength of the current move.

Key Levels

Resistance

• 17.09 — Overnight high

Support

• 16.42 — Upper Bollinger Band

• 12.06 — 38.2% Fibonacci retracement (August low to overnight high) 

  

  Crude Spread (CLZ6/CLZ7)

   

 

Natural Gas (NGV26)

Natural gas had a large bearish reversal day yesterday, trading above Friday’s high before reversing sharply and trading below Friday’s low. Price also moved below the 50-day moving average, which has acted as support over the past several sessions, although the market ultimately closed back above it at 2.886.

Natural gas is coming into the U.S. open near its overnight low at 2.858, down 0.057 at 7:50 a.m. The 20-day moving average is currently providing support, although it has not been tested in more than two weeks.

Momentum has crossed over and is now pointing lower from overbought territory. This suggests the market could test lower levels before momentum normalizes toward lower or neutral territory.

Key Levels

Resistance

• 2.886 — 50-day moving average / key near-term pivot

• 2.990 — Upper Bollinger Band

• 3.026 — Last week's reversal-bar high

Support

• 2.858 — 20-day moving average / current support

• 2.747 — August 25 low

• 2.726 — Lower Bollinger Band

Nat Gas (NGV26)

 

Mark Schaefer — LinkedIn

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Ethanol Update 

Natural Gas Update

Fuel and Freight Daily Report

Oil is back in focus after the Labor Day long weekend, with Brent pushing toward $100 as Middle East supply risks remain elevated. The market has returned with a firmer physical tone, with the Brent curve showing pronounced backwardation. The key question now is whether the geopolitical premium develops into sustained physical tightness.

Hormuz remains the main crude risk. Shipping through the Strait remains well below normal, with significant volumes still moving but continued uncertainty around the reliability of those flows. The issue for traders is less whether the waterway is technically open and more whether barrels can move consistently enough to support normal Gulf exports. Any further deterioration in vessel traffic would likely add another layer of support to the front of the curve.

Products remain particularly tight. Limited refining flexibility, Russian export restrictions and low inventories continue to support the product complex, with refined fuels showing significant strength relative to crude. That is an important signal for the physical market: the stress is not confined to the crude barrel.

Saudi Arabia’s latest Houthi attacks add another layer of uncertainty, with energy facilities in the south affected and operations at some sites halted. The extent of any lasting supply impact is still being assessed, but the attacks reinforce concerns around both regional infrastructure and shipping routes.

China remains an important demand watchpoint into year-end. Recent imports have improved from the previous month but remain weaker than last year, while the market is looking for a seasonal pickup in demand. A recovery in Chinese buying alongside continued Middle East disruption would make the current physical balance tighter.

Bottom line: Brent is back near $100, but the more important signals are the tightening curve, strong products and continued uncertainty around regional flows. Watch $100 Brent, the front spreads, gasoil cracks and actual shipping activity through Hormuz. The physical market remains the story.

Crude (CL1)

Crude opened higher after the weekend and remains bid heading into the U.S. open following the long weekend. Today marks the fifth consecutive day with crude pressing against the upper Bollinger Band, highlighting the continued strength in the move. Aside from Friday, when price stalled and closed relatively unchanged, crude has now posted eight consecutive days of higher lows as it continues to push toward $100.

Momentum also continues to point to strength, with the market remaining overbought but still trending higher. While the move is becoming increasingly stretched, price action has yet to show a meaningful reversal, keeping the near-term bias firmly higher.

Key Levels

Resistance

• 98.30 – 61.8% Fibonacci retracement (April high to July low)

• 100.00 – Key psychological level

Support

• 93.30 – Upper Bollinger Band

• 88.72 – Friday’s low

Crude (CL1)

Heating Oil (HOV6)

Heating oil traded higher overnight but has since given back roughly half of the move, opening the U.S. morning around 4.6527. Overnight price action pushed just above the upper Bollinger Band, reaching 4.7198, but fell short of testing Wednesday’s reversal-bar high at 4.7661.

The key thing to watch from here is whether last week’s bearish technical confluence begins to play out. The bearish reversal (a new high followed by a lower close) combined with the bearish divergence (a new price high but a lower momentum high) continue to suggest the potential for near-term weakness. Price action has not fully confirmed the setup yet, but the technical warning remains in place.

Key Levels

Resistance

• 4.7206 – Upper Bollinger Band

• 4.7661 – Wednesday’s reversal-bar high

Support

• 4.4338 – Friday’s low

• 4.3382 – 20-day moving average

Heating Oil (HOV6)

 

Crude Spread (CLZ6/CLZ7)

The spread is higher overnight but has pulled back from its high of 16.30, currently trading +1.42 at 15.64. The overnight rally took out last week’s high and marks the seventh day out of the last eight that price has made a higher low, as well as the fifth consecutive day trading above the upper Bollinger Band — both highlighting the continued strength in the spread.

Momentum remains overbought but is still pointing higher, with no clear signs of a near-term retracement following the strong move higher.

Key Levels

Resistance

• 16.30 – Overnight high

Support

• 13.04 – Friday’s low

• 11.57 – 38.2% Fibonacci retracement (August low to overnight high)

Crude Spread (CLZ6/CLZ7)

 

Natural Gas (NGV26)

Natural gas opened lower overnight but rallied back and is trading near unchanged heading into the U.S. open. The upper Bollinger Band has acted as strong resistance over the past two weeks, with price trading at or above the upper band on 10 of the last 11 trading days. Despite repeatedly testing the band, NG has yet to close above it. Above the upper Bollinger Band at 3.005, the 100-day moving average becomes the next important level to watch. NG has not traded above the 100-day since early March.

Momentum remains overbought and continues to point higher, although it is beginning to look stretched following the recent move. There are still no clear signs of a near-term reversal, keeping the near-term bias higher as long as price continues to hold above the 50-day moving average.

Key Levels

Resistance

• 3.026 – Last week’s high

• 3.050 – 100-day moving average

Support

• 2.894 – 50-day moving average

• 2.861 – 20-day moving average

Nat Gas (NGV26)

 

Mark Schaefer — LinkedIn

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The Geopolitical Context

Petroleum supplies remain under pressure worldwide, with crude oil output running 5-7 mmbls lower than normal as the Strait of Hormuz remains shut due to the US war with Iran.  Saudi Arabian tanker shipments are being rerouted through the Suez Canal due to the threats from Iranian-backed Houthi rebels based in Yemen.  Global refinery output is running 10 mmbls lower than normal due to outages around the Persian Gulf and Ukrainian drone attacks on Russian refineries.  Geopolitical risk remains the number one fundamental story for 2026 and the latest cycle of US military attacks against Iranian targets have helped lift nearby crude oil prices to six-week highs.

The renewed military attacks followed the expiration of the 60-day memorandum of understanding (MoU) that was to have provided a window for negotiating a lasting, more comprehensive agreement.  Diplomats now say Iran is willing to consider a return to the MoU conditions, but the US is adding demands for a permanent deal that includes limits on Iran’s nuclear program.  The Iranian regime is digging in its heels, resulting in a stalemate likely to include further military attacks to contest control of shipping through the Strait of Hormuz. 

OPEC Developments

With oil supplies under pressure and prices high, it might seem an odd time for OPEC membership to be under pressure, but that seems to be the case.  After years of complaints of a low quota, the UAE quit the group in May.  Nigeria has joined the International Energy Agency and seems to have one foot out the door.  And now there’s talk that original founding member Venezuela may leave the group as part of a deal with the US to develop its massive reserves.

In the near term, with overall supplies curtailed by war, any added supply may be easily absorbed into the market with little noticeable impact on price.  However, over the longer run these defections will make it harder for the remainder of the OPEC+ alliance to manage the market.

As a refresher on what that can mean, we recall the role OPEC+ producers played at the onset of the COVID-19 pandemic.  When Russia balked at agreeing to a production cut, Saudi Arabia raised output to bring them back to the table, triggering a sharp price decline that sent nearby WTI futures to negative $40 per barrel.  But the subsequent agreement eventually reduced the group’s crude oil output from the 38.9 mmbpd April peak to just 30.0 mmbpd in June of 2020, rebalancing the market enough to steer prices higher again.  This saved the economic prospects for OPEC+ and non-OPEC+ producers alike.

In general terms, OPEC+ supports the oil market by keeping capacity offline.  For example, Saudi Arabia has 12.0 mmbpd in capacity, but is pumping closer to 7.8 mmbpd.  This supports the front end of the curve, typically resulting in some degree of backwardation in calendar spreads.  OPEC typically targets production levels, not prices, but can be thought of as aiming to optimize revenues at levels high enough to cover national budgets, but not so high as to damage demand or fund competition.  It has been a balancing act.

Venezuelan crude oil production has been limited by lack of investment and mismanagement for decades, with its poor performance currently granted an exemption from the OPEC quota system.  In the 1990’s, Venezuela routinely pumped 3.2 mmbpd when its quota was 2.8 mmbpd, which the government excused as “just testing capacity.”  And based on its massive reserves there was talk of doubling output to more than 6 mmbpd.  

From annual peak of 3.5 mmbpd in 1997 just before Hugo Chavez took office, output fell to just 500,000 bpd in 2020 before recovering to an average of 940,000 bpd in 2025, according to the DOE.  So the potential for Venezuela to produce more oil is vast, but it’s going to require massive investment and a long time to expand capacity.

OPEC+ has announced it will leave production targets unchanged for October, not that we expect this to have much immediate impact on supply, which remains curtailed due transport restrictions through both the Strait of Hormuz and the Red Sea.  July actual OPEC+ production averaged 37.66 mmbpd according to OPEC’s estimate based on secondary sources.  This was up 1.42 mmbpd from June, but still 5.34 mmbpd below the 43.00 mmbpd 4Q 2025 average.  OPEC will publish its Monthly Oil Market Report on September 10 with ouput figures for August. 

Crude Oil

While the geopolitical risks and the fate of OPEC will drive the larger trends, the market will also incorporate shorter-term factors such as the weekly US inventory data.  While the US figures only reflect one piece of the global picture, the US is both the world’s largest producer and consumer of petroleum, and the DOE numbers often provide a valuable indication of what’s happening at the margin of the market, even if there can be plenty of noise around the signal.

The latest figures for the week ended August 28 included a further draw of 3.1 mmbls from the Strategic Petroleum Reserve.  With the latest decline, the SPR is now down 128.8 mmbls (31%) since March to its lowest level since 1982.  Even so, US commercial crude oil inventories have been maintained near normal working levels, with trade flows adjusting to the SPR release.

Despite the release from the SPR, US commercial crude oil inventories still fell 4.45 mmbls last week to 424.5 mmbls.  This was a near match with the five-year average result, leaving stocks at a 2.4 mmbls (0.6%) surplus to the five-year average benchmark.  Inventories at the Cushing, Oklahoma delivery point for NYMEX WTI futures ticked 0.1 mmbls higher to a three-week high of 22.5 mmbls, but were still 5.3 mmbls (19%) below their five-year average.

Looking ahead, the report for the week ended September 4 will be delayed until Thursday due to the US Labor Day holiday.  Overall, we expect refinery runs to remain near last week’s 98.0% rate for another week or two before scheduled seasonal maintenance trims throughput.  With crack spread margins at record levels we’d expect refiners to defer as much maintenance as possible, but still anticipate runs to fall to 16.0 mmbpd or less at the October seasonal trough.  As for commercial crude oil inventories, we expect to see little change, with another near match with the five-year average result.

Overall, crude oil futures prices may be due for some short-term consolidation or correction after their run to six-week highs.

Heating Oil (ULSD)

Heating oil prices remain well supported on the high level of international refinery outages due to the US war with Iran and ongoing Ukrainian drone attacks on Russian refineries.  The resulting drop in international supply has helped drive what has been an expanding deficit in US total distillate inventories.

For the week ended August 28, the DOE reported an unexpected 0.8 mmbls build in US total distillate inventories, ending a four-week string of consecutive draws.  This trimmed the year-on-five-year average deficit slightly to 16.6 mmbls (13.7%), but the market clearly remains tight.  We note that East Coast (PADD 1) inventories surrounding the NY Harbor delivery point for NYMEX futures fell 1.7 mmbls to a new low of just 19.3 mmbls, 13.2 mmbls (41%) below the corresponding four-week average.  In other words, most of the tightness is focused in the East.

Prices have reached a level that is having an impact on demand, with product shipments falling 449,000 bpd last week to 3.390 mmbpd, the lowest figure since July 10.  The four-week average implied demand of 3.660 mmbpd was 234,000 bpd (6.0%) lower than last year.  There may also be some seasonal weakness on the horizon as refiners typically cut back on shipping schedules over the Labor Day holiday.  But first, the market will see Thursday’s report for the week ended September 4, where we see US total distillate inventories as unchanged to as much as 1.0 mmbls lower on a spurt of refinery shipments ahead of the holiday.

So far, ULSD futures have settled for a peak valuation of $4.6822 per gallon and a $106.23 per barrel crack spread premium over the October WTI settlement.  These levels may represent a valid reflection of the physical tightness we’ve seen in this segment of the market, but they also leave the market overbought and vulnerable to at least some degree of technical correction.  Any further short-term easing of the physical tightness would encourage a pullback. 

RBOB Gasoline

The US gasoline market may not be as dramatically tight as distillates or jet fuel, but inventories remain lean and supportive, supporting what are still strong crack spread margins over the upstream WTI crude oil values.  The DOE data for the week ended August 28 showed US total gasoline stocks falling 1.2 mmbls to 205.7 mmbls, their lowest level since last November.  Refiners typically do draw down inventories of summer specification fuel at this time of year, but stocks were 12.9 mmbls (5.9%) lower than a year ago and 14.3 mmbls (6.5%) below their five-year average.  This was the largest year-on-five-year average deficit since August 7.

The East Coast (PADD 1) inventories surrounding the NY Harbor delivery point for NYMEX futures show a similar tightness.   After a 0.3 mmbls uptick to 52.6 mmbls for the week ended August 28, East Coast gasoline stocks were 2.9 mmbls (5.3%) below their five-year average.  While the deficits in the gasoline inventories are supportive, they are certainly less dramatic than the shortfall in distillates.

Although retail gasoline prices above the $4 mark are keeping pressure on consumers, the impact is smaller than what we’re seeing in the distillate data.  US product shipments of gasoline have averaged 8.905 mmbpd, a decline of 145,000 bpd (1.6%) from the same period of 2025.  We also note the decline was somewhat smaller than the decrease registered back in June.

With the summer driving season drawing to a close, the demand pressure on supplies will also be easing seasonally in the weeks ahead.  At the same time, scheduled refinery maintenance that will reduce output and gasoline inventories typically continue to work lower through the end of October or early November.

Looking ahead to the report for the week ending September 4, we see potential for a further 1.0 to 2.0 mmbls draw from US total gasoline inventories as an extension of the recent trend.  Gasoline stocks typically then rebound moderately over the Labor Day weekend when refiners cut back on shipping schedules.

October gasoline has traded for as much as $3.1926 this past week but encountered at least some technical resistance at that level.  Gasoline is also tracking relatively closely with the upstream WTI crude oil price, with the October gasoline crack spread fluctuating within a $40-44 per barrel range. 

US Natural Gas

The US natural gas market continues to express its characteristic independence, both from the petroleum market and the international price of natural gas.  Storage levels and US weather patterns remain the dominant factors with seasonality coming into sharper focus.

Thursday’s DOE storage report for the week ended August 28 showed a seasonal build of 30 bcf that lagged the 37-bcf five-year average gain.  Storage was 50 bcf (1.5%) lower than a year earlier but still 160 bcf (5.2%) above the five-year average coverage.  The year-on-five-year average surplus has declined the past three weeks in supportive fashion and was the smallest since June 19.

Looking ahead to the data for the week ended September 4, the firming trend is likely to continue.  Early expectations are for 20-25 bcf in net injections, a supportive level compared with the 52-bcf five-year average increase.

The natural gas price action has reflected this modest firming with nearby October futures now testing the $3.00 psychological barrier, a step up from the consolidation in the $2.80 area.  Nearby futures continue to hold above both the $2.622 low from August 2025 and the $2.495 low from March.

In contrast with the nearby gains, December futures are showing a more defensive consolidation in the $3.50 area, that seemingly balances the expectation that seasonal heating demand will support that level against the risk that slow start to the withdrawal season sees it lose its premium over the nearby futures and cash valuations. 

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. Evans on Energy 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 solely those of the analyst.

About: 

Evans on Energy founder Tim Evans has been writing daily market commentary on crude oil, heating oil, gasoline, and US natural gas since 1995, including 17 years as the Energy Futures Analyst at Citigroup.  The report brings a fundamental perspective informed by a Penn State degree in Mineral Economics that puts recent developments within their larger historical context. 

TimEvans.te59@gmail.com