Energy markets continue to exhibit mixed signals across the supply-demand spectrum. On the supply side, persistent declines in U.S. crude inventories and reduced Russian seaborne exports have helped support WTI prices. Simultaneously, colder-than-normal winter conditions across the Northern Hemisphere point to higher consumption for heating fuels, nudging both crude and heating oil futures upward. In the natural gas market, production disruptions, strong global LNG demand, and consecutive draws in U.S. storage reinforce near-term bullish momentum.

Nonetheless, upside potential is capped by indications of softer economic activity in China, where near-zero inflation and slower consumption raise concerns over energy demand. A firm U.S. dollar also dampens oil-import appetite globally, increasing the cost of dollar-denominated commodities for foreign buyers. For refined products like gasoline, larger-than-expected storage builds have pressured prices, underscoring that demand signals can vary considerably across end uses and geographies.

In this environment, investors may consider a balanced approach that accounts for both near-term weather-driven demand spikes and the risk of moderating consumption in key global markets.

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