Crude Oil Radar

2025-10-04 23:50

Table of Contents

Brian's Thoughts

Published: 10/04/2025 Focus: Crude Oil
On Sunday’s video I discussed that we would likely head back down to 63.80 and possibly more…well that didn’t take long. WTI is resting below that critical support/resistance line of 63.80 and may be sizing up for the drop below 61.64 which opens up the 50s. OPEC+ is looking at accelerating returning the remaining cuts in Nov-Dec-Jan - which is a bit odd as this is also normally a weak part of the annual price cycle. But possibly this move puts the OPEC countries in the driver seat with corporate drilling budgets being finalized for 2026 - so this could drop drilling activity more and thus opening up space for more DoC country production. Add in a bit of bearish outlook on the government shutdown and this provides good fuel for the bulls to attempt that push down. 61.64 is the line in the sand.

Today's Update

Updated: 2025-10-04 23:47:17 Length: 480 chars
Crude Oil's recent journey has been rocky, with WTI hovering just below the critical $63.80 level, suggesting a potential drop to $61.64, opening the door to the 50s. OPEC+ may accelerate cuts during a traditionally weak price season, possibly tightening supply as 2026 drilling budgets loom. Recent bearish sentiment from a government shutdown could fuel further declines. Notably, an 8% weekly loss signals market caution. Watch for how geopolitical tensions and dollar fluct...

Market Summary

Technical Outlook

Moderately Bearish
Score: -2/5
Short: SELL | Medium: SELL | Long: SELL

International Prices

Brent: $64.53 $0.42
WTI: $60.88 $0.4
Spread: $3.65 (Brent premium of $3.65)

Key Fundamentals

Crude Stocks: N/A (0)
Net Imports: N/A (0)

News Sentiment

BEARISH

Spec Positioning

Net Position: 26,483
Weekly Change: 10,316

Technical Analysis

Overall Technical Score (-5 to +5): -2 (Moderately Bearish)
Current Price: $60.88
Signal: Moderately Bearish

Moving Averages (9/20)

BEARISH

MA(9): $63.12

MA(20): $63.12

Current Price is 60.88, 9 day MA 63.12, 20 day MA 63.12

MACD (12, 26, 9)

BEARISH

MACD: -0.5833

Signal: -0.2952

Days since crossover: 3

MACD crossed the line 3 days ago and is in a bearish setup

RSI (14)

NEUTRAL

Value: 39.41

Category: NEUTRAL

RSI is 39.41 (note 70% is overbought and 30% is oversold)

Volume (vs 20d Avg)

HIGHER

Current: 290,507

Avg (20d): 240,711

Ratio: 1.21

Volume is higher versus 20 day average

Stochastic (14, 3)

OVERSOLD

%K: 7.97

%D: 5.62

Stochastic %K: 7.97, %D: 5.62. Signal: oversold

ADX (14)

NO TREND

ADX: 12.39

+DI: 15.78

-DI: 25.76

ADX: 12.39 (+DI: 15.78, -DI: 25.76). Trend: no trend

Williams %R (14)

OVERSOLD

Value: -92.03

Williams %R: -92.03 (oversold)

Bollinger Bands (20, 2)

BELOW MIDDLE

Upper: 65.72

Middle: 63.12

Lower: 60.52

Price vs BBands (20, 2): below middle. Upper: 65.72, Middle: 63.12, Lower: 60.52

Fundamental Analysis

Category Current Last Week Last Year 3 Yr Avg
Crude Production (Thousand Barrels a Day) 13505.0 13501.0 13200.0 12733.33
Crude Imports (Thousand Barrels a Day) 5833.0 6495.0 6456.0 6263.33
Crude Exports (Thousand Barrels a Day) 3751.0 4484.0 3897.0 4461.67
Refinery Inputs (Thousand Barrels a Day) 16168.0 16476.0 16353.0 15751.33
Net Imports (Thousand Barrels a Day) 2082.0 2011.0 2559.0 1801.67
Commercial Crude Stocks (Thousand Barrels) 416546.0 414754.0 413042.0 420065.67
Crude & Products Total Stocks (Thousand Barrels) 1695087.0 1687905.0 1649879.0 1636650.33
Gasoline Stocks (Thousand Barrels) 220694.0 216569.0 220083.0 218548.67
Distillate Stocks (Thousand Barrels) 123577.0 122999.0 122921.0 117116.0

International Price Analysis

International Price Summary

Brent crude (DEC 25) settled at $64.53, change $+0.42. WTI crude (NOV 25) settled at $60.88, change $+0.4. The Brent-WTI spread is currently $3.65 (Brent premium of $3.65). The Brent-WTI spread reflects differences in global vs. U.S. supply/demand dynamics, geopolitics, and transportation costs.

Brent Crude

$64.53
0.42
(DEC 25)

WTI Crude

$60.88
0.4
(NOV 25)

Brent-WTI Spread

$3.65
Brent premium of $3.65

OPEC Analysis

OPEC Market Analysis

Executive Summary:

The current OPEC market situation reflects a slight decline in crude oil prices amid stable global economic growth. Despite a decrease in the OPEC Reference Basket value and bearish sentiment from hedge funds, the fundamentals of the physical crude market remain solid, supported by consistent demand growth forecasts.

Key Market Metrics:

Category Production (mb/d) Demand (mb/d)
World Production 105.13519174813922 105.13519174813922
Non-DoC Production 51.439034 -
DoC Production 42.40 -

Supply-Demand Balance Analysis:

The data indicates that global oil demand is projected to grow by approximately 1.3 mb/d in 2025, while production from Non-DoC countries is expected to increase by 0.8 mb/d. This suggests a potential supply surplus, which could exert downward pressure on prices if demand does not keep pace with supply growth.

Production Landscape:

Major producers such as the US, Brazil, Canada, and Argentina are expected to drive Non-DoC production growth. In August, DoC countries increased their production to an average of 42.40 mb/d, showing a month-on-month increase of 509 tb/d, highlighting OPEC's ability to adjust output in response to market conditions.

Demand Patterns:

Demand growth is primarily driven by the non-OECD regions, particularly China and India, which are expected to see increases of 1.2 mb/d and 0.2 mb/d respectively in 2025. However, challenges remain in OECD countries where demand growth is more modest, indicating a potential divergence in regional demand trends.

Non-DoC vs DoC Analysis:

Non-DoC production is projected at approximately 51.44 mb/d, significantly higher than the DoC production of 42.40 mb/d. This disparity underscores the increasing role of Non-DoC countries in the global oil supply landscape, which may challenge OPEC's influence over market prices.

OPEC's Strategic Position:

OPEC's current market position reflects a cautious approach, balancing production adjustments with the need to maintain market share amid rising Non-DoC output. The organization may continue to monitor market dynamics closely, potentially adjusting its production strategy to stabilize prices.

Forward-Looking Indicators:

Looking ahead, the combination of stable economic growth and increasing Non-DoC production suggests that OPEC may face challenges in maintaining price stability. Continued monitoring of demand trends, particularly in emerging markets, will be crucial for OPEC's strategic planning.

Key Insights and Recommendations:

  • Monitor Non-DoC production trends closely as they may impact OPEC's pricing power.
  • Focus on enhancing cooperation among DoC members to ensure effective output management.
  • Evaluate demand growth forecasts regularly to adjust production strategies proactively.
  • Consider strategic investments in refining and processing capabilities to enhance margins.
  • Stay vigilant regarding geopolitical developments that could disrupt supply chains.

CFTC CoT Analysis

Sentiment: Bullish but Weakening
Positioning: Normal Range
Report Date: 2025-09-23

Managed Money

26,483
Change: -10,316
1.4% of OI

Producer/Merchant

283,712
Change: -9,029
14.6% of OI

Swap Dealers

-402,312
Change: +5,178
-20.8% of OI

Open Interest

1,936,690
Change: -25,930

Summary Analysis:

CFTC Commitment of Traders Report (Disaggregated) as of 2025-09-23

Crude Oil Positioning (WTI-PHYSICAL - NYMEX):

Open Interest: 1,936,690 contracts (-25,930)

Managed Money Net Position: 26,483 contracts (1.4% of OI)

Weekly Change in Managed Money Net: -10,316 contracts

Producer/Merchant Net Position: 283,712 contracts

Swap Dealer Net Position: -402,312 contracts

Market Sentiment (based on Managed Money): Bullish but Weakening

Positioning Analysis (Managed Money): Normal Range

Key Takeaways:

- Managed Money traders are large speculators, often driving price trends in Crude Oil.

- Producer/Merchant positions primarily reflect hedging activity.

- Swap Dealers act as intermediaries.

- Extreme positioning by Managed Money can indicate potential market reversals.

- CFTC data reports positions as of the report date, usually released each Friday.

About Disaggregated CoT Reports:

The Disaggregated CoT report provides a more detailed breakdown of futures market open interest.

It categorizes traders into: Producer/Merchant/Processor/User (Commercials), Swap Dealers, Managed Money (Speculators), and Other Reportables.

News Analysis

Market Sentiment Overview

BEARISH
Average Polarity: -0.7
Confidence: 1.0
Articles Analyzed: 42
Last Updated: 2025-10-04 23:50:03

Commodity Sentiment

CRUDE_OIL

-0.7

Top News Topics

Supply (5 articles)

Demand (2 articles)

Geopolitical (2 articles)

Economic Analysis

Economic Sentiment Summary

POSITIVE - Economic indicators generally supportive
Dollar Impact: Weaker USD may support commodity prices
Industrial Demand: Strong industrial demand signals
Interest Rate Impact: Stable/lower rates may support demand
Risk Sentiment: Low market volatility/risk appetite

Economic Indicators

USD_INDEX

97.72
Daily: -0.13 (-0.13%)
Weekly: -0.19 (-0.19%)

US_10Y

4.12
Daily: 0.03 (0.76%)
Weekly: -0.02 (-0.53%)

SP500

6715.79
Daily: 0.44 (0.01%)
Weekly: 54.58 (0.82%)

VIX

16.65
Daily: 0.02 (0.12%)
Weekly: 0.53 (3.29%)

GOLD

3880.8
Daily: 41.1 (1.07%)
Weekly: 59.9 (1.57%)

COPPER

5.06
Daily: 0.16 (3.27%)
Weekly: 0.22 (4.48%)

Fibonacci Analysis

Current Price: $60.88
Closest Support: $60.4 0.79% below current price
Closest Resistance: $62.79 3.14% above current price

Fibonacci Retracement Levels

0.0 $60.4 Support
0.236 $62.79 Resistance
0.382 $64.26
0.5 $65.46
0.618 $66.65
0.786 $68.35
1.0 $70.51

Fibonacci Extension Levels

1.272 $73.26
1.618 $76.76
2.0 $80.62
2.618 $86.87

ML Price Prediction

Current Price: $60.88
Forecast Generated: 2025-10-04 23:50:05
Next Trading Day: UP 0.27%
Date Prediction Lower Bound Upper Bound
2025-10-04 $61.05 $59.03 $63.07
2025-10-05 $61.15 $59.13 $63.18
2025-10-06 $61.24 $59.22 $63.26
2025-10-07 $61.29 $59.27 $63.31
2025-10-08 $61.26 $59.24 $63.28

ML Insights

  • Forecast generated using ARIMA(5, 1, 0).
  • The model predicts a price increase of ~0.27% for the next trading day (2025-10-04), reaching $61.05.
  • The 5-day forecast suggests relatively stable prices between 2025-10-04 and 2025-10-08.
  • The average confidence interval width is ~6.6% of the predicted price, indicating model uncertainty.
  • SIGNAL: Bullish signal, moderate uncertainty.

AI Analysis

💹

For Energy Traders:

The recent price movements indicate a bearish sentiment in the market, with the OPEC Reference Basket averaging $69.73/b and Brent and WTI both experiencing declines. The widening Brent-WTI spread at $3.65 suggests a divergence in supply/demand dynamics, which may present risks for short-term trades.

The support levels for WTI are critical to monitor, especially as the market remains in backwardation, indicating potential for price recovery. However, with hedge funds turning net short, volatility may increase, presenting both opportunities and risks for traders.

⛽

For Producers (Oil & Gas Companies):

The ongoing bearish sentiment in the market, coupled with rising crude inventories, signals a need for cautious production planning. The 509 tb/d increase in crude oil production by OPEC countries indicates a potential oversupply, which could pressure prices further. Producers should consider hedging strategies to mitigate risks associated with price volatility.

The balance between supply and demand remains critical, especially as global oil demand growth forecasts are relatively stable. However, with inventory levels being lower than historical averages, this could present both opportunities for pricing power and risks if demand falters.

🏭

For Consumers (Industrial/Refineries/Transportation):

Consumers should brace for potential input cost fluctuations as the Brent and WTI prices remain under pressure. The bearish news sentiment reflects concerns over global supply and demand, which could impact procurement strategies.

Additionally, with geopolitical tensions and fluctuating inventories, there are risks to supply reliability. It may be prudent to explore hedging options to manage these uncertainties effectively.

📊

For Commodity Professionals (Analysts, Consultants):

The current Crude Oil market presents a complex picture with bearish sentiment dominating due to increased inventories and speculative positioning. The fundamental balance remains tight, but the overall outlook is clouded by bearish news sentiment and a potential oversupply scenario.

Key driving factors include stable global economic growth forecasts and demand growth, particularly in non-OECD countries. However, the risks of geopolitical tensions and fluctuating inventories could lead to shifts in market dynamics. Analysts should monitor these trends closely to provide actionable insights for stakeholders.

Disclaimer: This analysis is for informational purposes only and does not constitute financial advice or specific buy/sell recommendations.

© 2025 Energy Research - All Rights Reserved