Written Commentary
NATURAL GAS
Natural gas prices continued to collapse early Friday, nearing the October low after reversing sharply from last week’s five-month highs. The selloff has been driven by a persistent shift toward warmer-than-normal 6-10 and 8-14 day forecasts across most of the U.S. through December 25, undermining expectations for strong winter heating demand.
Thursday’s EIA report showed a larger-than-expected 177 bcf storage draw, well above the five-year average, but it was not enough to counter the bearish influence of weather. Storage levels are now nearly unchanged from a year ago and remain above the five-year norm. Production and LNG feedgas flows have both edged to new records so far in December, adding further supply pressure.
Long-term demand themes—including data center and AI-related consumption growth, as well as China’s projected 5% increase in 2026 gas use—have offered limited support as traders remain focused on near-term weather and high output.
CRUDE OIL
February Crude Oil was steady early Friday, trading in the lower half of Thursday’s range as the market continued to focus on rising global supply expectations despite several potentially supportive factors. Russia’s November seaborne product exports slipped only slightly as refinery maintenance ended, and the IEA’s latest report trimmed supply-growth forecasts for 2025 and 2026 by only marginal amounts, leaving expectations for sizable production increases largely intact. The agency noted that fourth-quarter supply tightened due to unplanned outages in Kuwait and Kazakhstan and reduced flows from Russia and Venezuela. Demand forecasts were revised higher for both 2025 and 2026, but not enough to shift sentiment. Geopolitical risk remains in play, with the U.S. preparing to intercept additional Venezuelan tankers tied to sanctioned flows, and Kazakhstan planning to lower its 2026 output due to field maintenance and damage to the CPC export terminal.
PRODUCTS
January RBOB closed a gap on Thursday, leaving next support at 1.7180, followed by 1.6900. Look for resistance at 1.8000 and 1.8139. January ULSD support comes in at 2.1742 and 2.0969, with resistance at 2.2850 and 2.3271.
Interested in more futures markets? Explore our Market Dashboards here.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
