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Liquidity Energy Insight Weekly
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| 18 November 2025 |
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Major Market Dashboard
Click panels below to jump to detailed commodity analysis
| Commodity |
Price |
Weekly Δ |
% Chg |
YTD |
Outlook |
| Brent Crude |
$64.34 |
-$0.09 |
-0.14% |
-19.3% |
Bearish |
| WTI Crude |
$60.09 |
$0.00 |
0.00% |
-12.3% |
Bearish |
| RBOB Gasoline |
$2.00/gal |
+$0.05 |
+2.65% |
+2.9% |
Neutral |
| ULSD Heating Oil |
$2.52/gal |
-$0.01 |
-0.37% |
+12.2% |
Bullish |
| Natural Gas |
$4.50/MMBtu |
-$0.07 |
-1.54% |
+51.2% |
Neutral |
Last Week's Key Developments
- Crude Oil Inventories Surge: U.S. crude stocks rose 6.4M barrels following 5.2M build prior week, pushing total to 427.6M barrels as oversupply fears mount.
- OPEC+ Signals Caution: November production +137k bpd but Q1 2026 pause announced—first delay since restoration began, suggesting policy evolution.
- Heating Oil Outperforms: ULSD inventory deficit hits 8% below 5-year average during typical build season, pushing crack spreads to multi-month highs.
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🎯 Top 3 Trading Opportunities This Week
Trade ideas are for informational purposes only and should not be construed as investment advice.
1. LONG HEATING OIL CRACK SPREAD
Historic ULSD inventory deficits during typical build season signal structural tightness. With winter demand approaching and distillate stocks 8% below 5-year average, heating oil crack spread offers compelling risk/reward as crude faces oversupply pressures.
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Entry:
$40-42/bbl crack
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Target:
$45-48/bbl
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Stop:
Below $37/bbl
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Risk/Reward:
2.5:1 favorable
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2. FADE BRENT RALLIES ABOVE $66
Global oversupply building with EIA forecasting 2.2 mb/d inventory growth in 2026. Weak seasonal demand ahead, OPEC+ increasing production despite surplus conditions. Any geopolitical spikes offer attractive short entry points.
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Entry:
Brent $66-68 zone
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Target:
$58-60/bbl
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Stop:
Above $70/bbl
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Risk/Reward:
3:1 favorable
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3. NATURAL GAS RANGE TRADE
Storage 6% above 5-year average with warm winter forecast limiting upside. However, robust LNG exports (14.9 Bcf/d, +25% YoY) provide downside support. Well-defined range offers tactical mean reversion opportunities.
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Entry:
Sell $4.60-4.75 / Buy $4.00-4.15
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Target:
Midpoint $4.35-4.40
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Stop:
$4.85 / $3.85
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Risk/Reward:
2:1 each direction
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📅 WEEK AHEAD CALENDAR
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Critical week with three major data releases. Wednesday's EIA report will be key for crude oil direction. Natural gas storage Thursday should confirm comfortable winter cushion despite above-average levels.
Wednesday, Nov 20 | 10:30 AM ET: EIA Petroleum Report
Expected: Crude draw 0.5-1.5 mmbls (seasonal pattern plus refinery maintenance)
Previous: Build of 6.4 million barrels
Impact: HIGH - Further builds could pressure WTI below $60/bbl
Key Focus: Distillate inventories—any decline reinforces bullish heating oil case
Thursday, Nov 21 | 10:30 AM ET: Natural Gas Storage
Expected: Injection of 25-35 Bcf (vs 5-year average of +35 Bcf)
Previous: Larger-than-expected injection pressured prices
Impact: MEDIUM - Storage now 6% above 5-year average
Implication: Above-average builds reinforce bearish sentiment toward $4.00
Friday, Nov 22 | 1:00 PM ET: Baker Hughes Rig Count
Previous: Natural gas rigs +3 to 128 (Haynesville added 2 rigs)
Impact: LOW - Directional indicator for future supply
Watch For: Oil rig trend vs production resilience
Events to Monitor
- OPEC+ monitoring committee reviews production compliance and November targets
- China strategic petroleum reserve buying patterns (estimated 0.8 mb/d impact)
- Russian oil export adjustments following latest sanctions implementation
- Northeast weather forecasts (critical for heating oil demand trajectory)
- U.S. refinery maintenance schedules (constraining product supply into year-end)
Trading Strategy for the Week
Range-bound crude trading likely continues. Focus on refined products where fundamentals favor upside. Natural gas offers two-way range trading. Key inflection: Does Wednesday's EIA report confirm import normalization or extended tightness?
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🛢️ BRENT CRUDE OIL
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Supply Risk: Medium
Outlook: Bearish
Brent consolidated at $64.34 (-$0.09, -0.14%) as oversupply concerns overwhelmed geopolitical risk premiums. The benchmark crude fell $15 from January's $80 levels (-19.3% YTD) as global inventory builds accelerated. With OPEC+ adding production despite surplus conditions and weak seasonal demand ahead, the path of least resistance remains lower into Q1 2026.
OPEC+ Policy Shift
OPEC+ increased November production by 137,000 bpd, marking the third consecutive monthly hike. More significantly, the group announced a pause to further increases through March 2026—the first such delay since restoration began. The pause reflects growing concern that aggressive supply additions could crash prices below $55/bbl. The alliance now projects 2026 supply will match demand—a notable pivot from earlier deficit forecasts.
Global Supply Dynamics
Global oil supply reached 108.2 mb/d in October. Year-to-date supply has surged 6.2 mb/d since January—a massive increase split evenly between OPEC+ and non-OPEC+ producers. Growth outside OPEC+ is led by Brazil, Guyana, Canada, and the United States, with U.S. production hitting a record 13.6 mb/d following an upward revision of 206,000 bpd this week. Non-OPEC+ supply is forecast to grow by 1.5 mb/d in both 2025 and 2026.
Demand Weakness
Global oil demand growth was revised down to 790 kb/d for 2025 and 770 kb/d for 2026—less than half the historical 1.5 mb/d annual increases. China's economic slowdown continues to disappoint. The combination of tepid demand growth and surging supply has pushed global inventories to 7,655 mb, the highest level since July 2021.
Trading Implication
The setup favors fading rallies above $66 as OPEC+'s production pause merely delays—rather than eliminates—the oversupply problem. With inventory builds forecast at 2.7 mb/d through Q1 2026, any geopolitical spikes offer attractive short entries targeting $58-60. Range: $60-67 consolidation likely continues.
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🛢️ WTI CRUDE OIL
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Inventory Risk: Low
Outlook: Bearish
WTI held flat at $60.09 (unchanged on the week) as the U.S. benchmark tracked Brent's weakness while domestic fundamentals deteriorated. Commercial crude inventories surged 6.4 million barrels following a 5.2 million barrel build the prior week, pushing stocks to 427.6 million barrels. Despite being 4% below the 5-year average, the rapid build rate signals oversupply pressures that could drive prices toward the low $50s in Q1 2026.
Domestic Production & Imports
U.S. crude production received an upward revision this week, increasing the estimate by 206,000 bpd to 13.6 mb/d—a new record high. Meanwhile, crude imports collapsed to 5.2 mb/d last week, down 12.1% versus the same period last year, reflecting reduced refiner demand amid weak crack spreads and ample domestic supply.
Trading Implication
WTI's domestic oversupply mirrors Brent's global imbalance. With production at record highs, imports at four-year lows, and inventories building rapidly, traders should fade rallies above $62 targeting $55-58 over the next 8-12 weeks.
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🔥 HEATING OIL / ULSD
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Inventory Risk: High
Outlook: Bullish
Heating oil dipped $0.01 to $2.52/gallon (-0.37%) but remains the year's standout performer at +12.2% YTD. The minor weekly decline masks a structural bull case: distillate inventories declined to 112.2 million barrels during what should be prime build season, sitting 8% below the 5-year average. With winter demand beginning and crack spreads strengthening, ULSD offers compelling long opportunities against oversupplied crude.
Historic Inventory Deficit
U.S. distillate stocks dropped 0.6 million barrels last week to 112.2 million barrels—the first weekly decline in five weeks and a shocking development for mid-November. This time of year typically sees aggressive inventory builds as refiners produce heating oil ahead of peak winter demand. The 8% deficit versus the 5-year average is particularly concerning given that East Coast inventories show an even more severe deficit.
Crack Spreads & Market Structure
The heating oil crack spread has strengthened to approximately $40-42/barrel as the product outperforms crude by a wide margin. More telling is the futures curve structure: backwardation has widened from a typical 2 cents/gallon to approximately 3 cents/gallon, indicating immediate supply tightness. This backwardation rewards storage drawdowns—the opposite of the crude market's contango structure.
Trading Implication
Heating oil offers one of the best risk/reward setups in the energy complex. With inventories declining during build season, winter demand ahead, and crack spreads in backwardation, target $2.60-2.75 over the next 4-8 weeks. The crack spread trade (long HO vs short CL) offers even better risk/reward given crude's bearish fundamentals.
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⛽ RBOB GASOLINE
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Demand Risk: Medium
Outlook: Neutral
R-BOB gasoline rallied $0.05 to $2.00/gallon (+2.65%) as refinery run rates increased and product inventories declined modestly. The 2.9% YTD gain masks a year of range-bound trading, with prices struggling to break out of the $1.85-2.10 channel. Seasonal weakness into December will compete with low inventories, leaving gasoline in a neutral holding pattern until spring driving season.
Production & Inventory Status
Gasoline production increased last week to 9.9 mb/d as refineries completed maintenance. Despite the production increase, total motor gasoline inventories declined 0.9 million barrels. Total stocks of 4% below the 5-year average provide modest support to prices, though the deficit is not severe enough to trigger supply concerns.
Trading Implication
Gasoline lacks a compelling directional trade currently. The range-bound price action and balanced fundamentals suggest a neutral stance is appropriate. Range: $1.85-2.10 likely contains prices through year-end. Wait for a breakout or seasonal patterns to reassert in Q1 2026 before taking directional positions.
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💨 NATURAL GAS
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LNG Export: Strong
Outlook: Neutral
Natural gas retreated $0.07 to $4.50/MMBtu (-1.54%) as traders took profits following a remarkable +51.2% YTD surge. Storage levels 6% above the 5-year average and warm winter forecasts limit upside potential, while robust LNG export growth (+25% YoY to 14.9 Bcf/d) provides downside support. The setup favors tactical range trading between $4.00-4.75 over directional bets.
Storage Surplus & Winter Outlook
Natural gas storage currently sits 173 Bcf (6%) above the 5-year average following a robust injection season. Thursday's EIA storage report will be critical: expectations call for a 25-35 Bcf injection versus the 5-year average of 35 Bcf. Above-average injections would reinforce bearish sentiment and pressure prices toward $4.00 support.
LNG Export Growth
U.S. LNG exports continue to surge, with EIA forecasting 14.9 Bcf/d in 2025 (+25% YoY) and 16.4 Bcf/d in 2026. This structural demand growth from LNG provides a floor under natural gas prices—exports effectively "remove" gas from the domestic market, tightening balances. Global LNG spot prices in Asia ($11.14/MMBtu) and Europe ($10.58/MMBtu) remain well above U.S. Henry Hub prices.
Trading Implication
Natural gas offers tactical range-trading opportunities rather than directional conviction. Sell rallies toward $4.60-4.75 targeting $4.35-4.40, with stops above $4.85. Buy dips toward $4.00-4.15 targeting the same midpoint, with stops below $3.85. Risk/reward is approximately 2:1 in each direction.
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Bottom Line
The crude oil complex faces mounting oversupply pressures that are likely to intensify through Q1 2026. U.S. inventories building at 2.7 mb/d while OPEC+ continues adding production despite announcing a Q1 pause—a clear signal that the market balance has shifted decisively bearish. Brent's $15 decline from January highs is just the beginning: EIA's forecast of $54/bbl in Q1 2026 implies another 10-15% downside from current levels. Traders should fade any geopolitical-driven rallies above $66, as the fundamental backdrop offers no support for sustained gains.
Refined products tell two divergent stories. Heating oil stands out as the year's best performer (+12.2% YTD) with structural inventory deficits creating compelling long opportunities as winter demand materializes. The 8% storage deficit versus seasonal averages during prime build season is unprecedented—even a mild winter should keep crack spreads elevated and prices supported. Meanwhile, gasoline remains trapped in a $1.85-2.10 range with no catalyst to break out until spring driving season arrives in Q1 2026.
Natural gas has completed its remarkable recovery from sub-$2.00 lows to establish a $4.00-4.75 range that reflects more balanced fundamentals. Storage 6% above the 5-year average and warm winter forecasts argue against sustained upside, while LNG export growth (+25% YoY to 14.9 Bcf/d) provides robust downside support. This setup favors tactical range trading over directional bets.
This Week's Focus
1. Wednesday's EIA Petroleum Report
Another large crude build (3+ million barrels) could trigger technical breakdown below $60 WTI/$64 Brent. Watch distillate numbers closely.
2. OPEC+ Production Compliance
The group's November monitoring meeting will reveal whether members are actually restraining output as promised or continuing to exceed quotas.
3. Weather Developments
Northeast temperature forecasts will drive near-term heating oil sentiment. A cold forecast could spark a rally toward $2.60-2.75.
Strategy into year-end: Maintain bearish crude bias (fade rallies above $66 Brent/$62 WTI), build long heating oil positions on dips below $2.45, and trade natural gas tactically within the $4.00-4.75 range. The divergence between oversupplied crude and tight distillates offers the best risk/reward via crack spreads. Risk management is critical as year-end liquidity thins.
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DISCLAIMER: This newsletter is provided for informational purposes only and does not constitute investment advice, a recommendation, or a solicitation to buy or sell any securities or financial instruments. The information contained herein is based on sources believed to be reliable but is not guaranteed as to accuracy or completeness. Past performance is not indicative of future results. Trading commodities and energy markets involves substantial risk of loss and is not suitable for all investors. You should carefully consider your financial situation and risk tolerance before making any trading decisions.
The trading opportunities and strategies discussed in this newsletter are provided for educational purposes only. Liquidity Energy and its affiliates are not registered investment advisors and do not provide personalized investment advice. Any trades or positions discussed may not be appropriate for your specific circumstances. You should conduct your own research and consult with a qualified financial professional before making any investment decisions.
Forward-looking statements, including price forecasts and market outlooks, are based on current market conditions and assumptions that may prove incorrect. Actual results may differ materially from those projected. Market conditions can change rapidly, and historical trends may not continue.
DATA SOURCES: U.S. Energy Information Administration (EIA), International Energy Agency (IEA), Organization of the Petroleum Exporting Countries (OPEC), Baker Hughes, Bloomberg, CME Group, and other publicly available market data. All prices and data as of Friday, November 15, 2025, market close unless otherwise noted.
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Liquidity Energy | Energy Trading Intelligence
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