Energy Cross Asset Note

Crude is trading near a five-month high as fresh threats around Hormuz collide with Gulf supply that keeps coming back. Iran’s first vice president said the country has no choice but to assert control over the strait, offering safe passage only to friendly nations and warning that the US must pay the price for the war. Brent is near $110 and up about 80% this year, and diesel is rallying even harder. Physical flows are recovering, though. Washington says Gulf crude exports are back to roughly 80% of prewar levels, and Iraq’s October exports are running above 3.4 million barrels a day, close to prewar pace, helped by steep discounts. Washington is also authorizing the sale of sanctioned tankers so they can legally carry crude, aiming to add shipping capacity and ease freight costs. Iran’s own export terminals are sitting empty under the US blockade, and Saudi Arabia pushed its flagship investment summit to 2027 after the Houthi attacks. November WTI expires today and is trading about $5 over December, up from $3 on Monday, so the front of the curve may stay volatile into the close. In nat gas, November fell to its lowest settlement since October 2 on Monday as offshore production came back online after Isaias. Lower-48 output is running about 6% above last year, and that supply is outweighing LNG feedgas above 21 bcf/day and a cooler shift in the eastern forecast. Overseas, European gas is at its highest since late 2022, Asian LNG may top $30, and at least one US cargo has been diverted from Asia to Europe. For clients, crude above $100 is being carried by headlines and a tight front month, so defined risk matters more than chasing. Nat gas is back at the bottom of a base that has held since August, and US supply is the reason it can’t hold rallies while overseas prices climb. 

Crude Oil - The Setup

Crude Oil - The Technicals

Crude Oil

Current Price: $100.70, up $2.18 (2.21%) | Session high $100.93, low $98.04

Chart Setup
December is trading above $100 for the first time, with a high of $100.93 this morning. Monday’s dip to $96.72 held Thursday’s high, and price settled at $98.54. Overnight buyers then carried it through Monday’s $99.24 high and back above the upper edge of the rising channel, which sits near $99.00. That’s the second push outside the channel in three sessions. Friday’s close above it didn’t hold on Monday, so today’s settlement is the test. Price is now about $8.70 above the rising 20 day at $92.02, with the 50 day at $86.91 trailing well behind. On the front-month chart, the only overhead mark of note is the April high near $101.40.

Key Levels Above

1. $101.40 (April high on the front-month chart)
2. $100.93 (today’s high, high of the move)

Current Price: $100.70

Key Levels Below

1. $99.24 (Monday high)
2. $99.00 (upper edge of the channel, with Friday’s settle at $99.02)
3. $98.54 (Monday settle)
4. $98.04 (today’s low)
5. $96.73 (Thursday high, held Monday at $96.72)

Bias
$99.24 is the level to manage against. A settlement above it puts December outside the channel for the second time in three sessions and keeps $100.93 and $101.40 in play. A settlement back below $98.54 would be a second failure at the channel edge in three days and points back toward $96.73. With price stretched nearly $9 above the 20 day, chasing above $100 carries wide risk for sidelined traders. A pullback that holds the $99.00 to $99.24 area offers a defined-risk entry, with a stop under $98.04.

Seasonal Tendencies Update

(Updated on 10.19.26)

Below is a look at historical price averages for December Crude Oil futures on a 5, 10, 15, 20, and 30-year time frames over a 6-month time frame (Past performance is not necessarily indicative of future results). Red = 5y, Green = 10y, Blue = 15y, Yellow = 20y, Violet = 30y 

Natural Gas - The Setup

Natural Gas - The Technicals

Natural Gas

Current Price: $3.00, down $0.06 (1.93%) | Session high $3.05, low $2.99

Chart Setup
November has dropped 33 cents in a week, from the October 13 high at $3.33 to $3.00 this morning, with three straight lower settles. Monday’s $3.06 settle was the lowest since October 2, and price is now below all four averages, including the 50 day at $3.07. The 20 day has rolled over at $3.14 and slipped back under the 100 day at $3.16, undoing the improvement from earlier this month. Price is sitting at the top of the August to October base. The $2.90 triple bottom, tested six times since August without breaking, is 10 cents below.

Key Levels Above

1. $3.16 (100 day)
2. $3.14 (20 day, with the old range top at $3.15)
3. $3.07 (50 day)
4. $3.06 (Monday settle)
5. $3.05 (today’s high)

Current Price: $3.00

Key Levels Below

1. $2.99 (today’s low)
2. $2.91 (early October low)
3. $2.90 (triple bottom)

Bias
The 50 day at $3.07 is the level to manage against, now from below. A settlement below $2.99 likely brings a seventh test of the $2.90 base. A break and settlement below $2.90 would undo the triple bottom and put November at new lows for the contract. A settlement back above $3.07 would return price to the upper half of the base and reopen $3.15. For sidelined traders, the base offers defined risk for buyers near $2.90 to $2.91, with a stop just under. With production this strong, though, it may pay to let the test happen first rather than buying ahead of it at $3.00.

Seasonal Tendencies Update

(Updated on 10.19.26)

Below is a look at historical price averages for December Natural Gas futures on a 5, 10, 15, 20, and 30-year time frames over a 6-month time frame  (Past performance is not necessarily indicative of future results). Red = 5y, Green = 10y, Blue = 15y, Yellow = 20y, Violet = 30y 

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Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.

Hypothetical Performance Disclaimer

One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.

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This message and its content is intended only for the person or entity to which it is addressed and should not be shared with additional parties. Seasonal tendencies are a composite of some of the most consistent commodity futures seasonals that have occurred in the past several years. There are usually underlying, fundamental circumstances that occur annually that tend to cause the futures markets to react in similar directional manner during a certain calendar year even if a seasonal tendency occurs in the futures, it may not result in a profitable transaction as fees and the timing of the entry and liquidation may impact on the results. No representation is being made that any account has in the past, or will in the futures, achieve profits using these recommendations. No representation is being made that price patterns will recur in the future.

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