Everything in the Crude market has been pointing down - economy, demand, tariffs - take the pick on the negative headspace news article of the day. The main thesis that oil analysts have been talking about is oversupply as OPEC+ has resumed production of barrels (despite falling short on actually producing the barrels). The key question is whether demand will pick up or not? This is critical because the demand side is held up due to China pulling in over 1 mmbpd to fill their ever growing SPR. This skew means that on balance - world demand is too light for the supply being produced. I maintain that we have near term weakness in demand and price but long term (horizon is maybe late 2026), we will begin a structural increase in price as non-OPEC barrels will need to pave the way for growth (and those areas need 80+ to increase supply). As for now - we are at the critical support level of 57.35 which if this level breaks, we are likely headed down to the 40s. This week - all eyes are on 57.35.
ER
Crude Oil Radar
2025-12-16 00:05
Table of Contents
Brian's Thoughts
Today's Update
Crude oil prices are under pressure, primarily due to concerns over demand in light of ongoing economic challenges and oversupply from OPEC+. Analysts highlight that China's heavy SPR purchases are distorting demand, leading to a bearish outlook. Currently, prices hover around the critical support level of $57.35; breaking this could see prices tumble into the $40s. The long-term forecast suggests potential price recovery by late 2026 as non-OPEC supply struggles to meet future demand, but for now, the outlook remains weak.
Market Summary
Technical Outlook
Moderately Bearish
Score:
-2/5
Short: SELL
|
Medium: SELL |
Long: SELL
International Prices
Brent:
$61.12
$0.16
WTI:
$57.44
$0.16
Spread:
$3.68
(Brent premium of $3.68)
Key Fundamentals
Crude Stocks:
N/A
(0)
Net Imports:
N/A
(0)
News Sentiment
BEARISH
Spec Positioning
Net Position:
-37,010
Weekly Change:
24,339
Technical Analysis
Overall Technical Score (-5 to +5):
-2
(Moderately Bearish)
Current Price:
$56.5
Signal:
Moderately Bearish
Moving Averages (9/20)
BEARISH
MA(9): $58.43
MA(20): $58.75
Current Price is 56.5, 9 day MA 58.43, 20 day MA 58.75
MACD (12, 26, 9)
BEARISH
MACD: -0.6243
Signal: -0.4426
Days since crossover: 3
MACD crossed the line 3 days ago and is in a bearish setup
RSI (14)
NEUTRAL
Value: 36.24
Category: NEUTRAL
RSI is 36.24 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 5,887
Avg (20d): 227,652
Ratio: 0.03
Volume is lower versus 20 day average
Stochastic (14, 3)
OVERSOLD
%K: 1.72
%D: 10.32
Stochastic %K: 1.72, %D: 10.32. Signal: oversold
ADX (14)
NO TREND
ADX: 15.44
+DI: 11.7
-DI: 23.74
ADX: 15.44 (+DI: 11.7, -DI: 23.74). Trend: no trend
Williams %R (14)
OVERSOLD
Value: -98.28
Williams %R: -98.28 (oversold)
Bollinger Bands (20, 2)
BREAKOUT LOWER
Upper: 60.68
Middle: 58.75
Lower: 56.83
Price vs BBands (20, 2): breakout lower. Upper: 60.68, Middle: 58.75, Lower: 56.83
Fundamental Analysis
| Category | Current | Last Week | Last Year | 3 Yr Avg |
|---|---|---|---|---|
| Crude Production (Thousand Barrels a Day) | 13853.0 | 13815.0 | 13513.0 | 12943.67 |
| Crude Imports (Thousand Barrels a Day) | 6589.0 | 5981.0 | 7290.0 | 6456.0 |
| Crude Exports (Thousand Barrels a Day) | 4009.0 | 3613.0 | 4235.0 | 3728.67 |
| Refinery Inputs (Thousand Barrels a Day) | 16860.0 | 16876.0 | 16910.0 | 16294.0 |
| Net Imports (Thousand Barrels a Day) | 2580.0 | 2368.0 | 3055.0 | 2727.33 |
| Commercial Crude Stocks (Thousand Barrels) | 425691.0 | 427503.0 | 423375.0 | 428950.67 |
| Crude & Products Total Stocks (Thousand Barrels) | 1684734.0 | 1687647.0 | 1629112.0 | 1617861.33 |
| Gasoline Stocks (Thousand Barrels) | 220819.0 | 214422.0 | 214603.0 | 222428.33 |
| Distillate Stocks (Thousand Barrels) | 116788.0 | 114286.0 | 118100.0 | 118348.33 |
International Price Analysis
International Price Summary
Brent crude (FEB 26) settled at $61.12, change $-0.16. WTI crude (JAN 26) settled at $57.44, change $-0.16. The Brent-WTI spread is currently $3.68 (Brent premium of $3.68). The Brent-WTI spread reflects differences in global vs. U.S. supply/demand dynamics, geopolitics, and transportation costs.
Brent Crude
$61.12
0.16
(FEB 26)
WTI Crude
$57.44
0.16
(JAN 26)
Brent-WTI Spread
$3.68
Brent premium of $3.68
OPEC Analysis
World Demand 2025
105.14
million barrels/day
Demand Growth 2025/24
+1.30%
year-over-year
World Demand Comparison (2025 vs 2026)
Regional Demand Breakdown
Quarterly Trends (2025-2026)
Supply-Demand Balance
China Oil Demand Trend
India Oil Demand Trend
United States Oil Demand Trend
Economic Growth vs Oil Demand
Year-over-Year Market Analysis
OPEC Countries Production
Data Sources Used:
World Demand
Supply Balance
China Data
India Data
US Data
Economic Growth
World Demand
105.14
mb/d
+1.30%
OECD / Non-OECD
OECD:
45.97
Non-OECD:
59.17
Asia Giants
China:
16.86
India:
5.66
Supply Gap
42.47
mb/d
DoC Required
OPEC Market Analysis
Market At a Glance
The oil market is currently experiencing a significant demand-supply imbalance, with global oil demand projected to grow by 1.3 mb/d in 2025. Non-DoC liquids production is expected to increase by 0.9 mb/d, but the demand for DoC crude is revised down to 42.4 mb/d. This scenario presents both challenges and opportunities for OPEC's production strategies moving forward.
Today's Critical Numbers
- World Demand: 105.1 mb/d in 2025, with a growth rate of +1.4 mb/d in 2026
- OECD Demand: 0.1 mb/d growth in 2025
- Non-OECD Demand: 1.2 mb/d growth in 2025
- China Demand: 4.8% growth forecast for 2025
- India Demand: 6.5% growth forecast for 2025
Supply vs Demand Gap Analysis
- Current Supply-Demand Gap: 42.4 mb/d in 2025
- Regions Driving Deficit: Demand for DoC crude is revised down, indicating a tightening market for OPEC members
- Implications for OPEC: Adjustments in production levels may be necessary to align with the revised demand forecasts
Regional Powerhouses
- China: Demand trajectory remains robust, with forecasts indicating a growth rate of 4.8% for 2025
- India: Continues to show strong growth potential with a forecast of 6.5% for 2025
- Americas: Resilience in demand, particularly from the US, as imports and exports fluctuate
- Europe: Faces challenges with stagnant growth, impacting overall demand dynamics
What's Next
- 2025-2026 Outlook: Global oil demand is projected to grow by 1.4 mb/d in 2026, indicating a steady recovery
- Risks: Potential geopolitical tensions and economic slowdowns could impact demand
- Opportunities: Increased demand from emerging markets like India and China presents growth avenues for OPEC
- Market-Moving Factors: Watch for changes in US production levels and OPEC's response to demand fluctuations
Key Takeaways
- Surprising Data Point: The downward revision of DoC crude demand highlights market vulnerabilities
- Biggest Risk Factor: Geopolitical tensions that could disrupt supply chains
- Opportunity Area: Capitalizing on growth in non-OECD regions, particularly India and China
- Strategic Recommendation: OPEC should consider flexible production strategies to adapt to changing demand forecasts
Americas
25.34 mb/d
China
16.86 mb/d
India
5.66 mb/d
Asia Pacific
9.78 mb/d
Europe
13.51 mb/d
Middle East
8.96 mb/d
CFTC CoT Analysis
Sentiment:
Bearish and Strengthening
Positioning:
Normal Range
Report Date:
2025-11-25
Managed Money
-37,010
Change: -24,339
-2.0% of OI
Producer/Merchant
273,875
Change: -2,162
14.5% of OI
Swap Dealers
-339,063
Change: +17,275
-17.9% of OI
Open Interest
1,890,503
Change: 22,480
Summary Analysis:
CFTC Commitment of Traders Report (Disaggregated) as of 2025-11-25
Crude Oil Positioning (WTI-PHYSICAL - NYMEX):
Open Interest: 1,890,503 contracts (+22,480)
Managed Money Net Position: -37,010 contracts (-2.0% of OI)
Weekly Change in Managed Money Net: -24,339 contracts
Producer/Merchant Net Position: 273,875 contracts
Swap Dealer Net Position: -339,063 contracts
Market Sentiment (based on Managed Money): Bearish and Strengthening
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:
-0.75
Confidence:
1.0
Articles Analyzed:
39
Last Updated:
2025-12-16 00:04:23
Commodity Sentiment
CRUDE_OIL
-0.75
Top News Topics
Supply (6 articles)
- Sugar Prices Pressured as India Boosts Sugar Production and Crude Oil Declines Barchart
- Sugar Prices Decline on Higher Indian Production and Weakness in Crude Barchart
- Oil prices fall as supply outlook offsets disruptions in Venezuelan flows Reuters
- Supply Limits, Geopolitical Risk to Support Crude in 2026 — Market Talk Dow Jones Newswires
- Oil Poised for Significant Weekly Loss on Oversupply Prospects — Market Talk Dow Jones Newswires
- Oil Poised for Weekly Loss as Traders Focus on Ukraine, Bearish Supply Outlook — Market Talk Dow Jones Newswires
Demand (2 articles)
Infrastructure (1 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
98.27
Daily:
-0.13 (-0.13%)
Weekly:
-0.95 (-0.96%)
US_10Y
4.18
Daily:
-0.01 (-0.29%)
Weekly:
-0.0 (-0.1%)
SP500
6816.51
Daily:
-10.9 (-0.16%)
Weekly:
-24.0 (-0.35%)
VIX
16.5
Daily:
1.65 (11.11%)
Weekly:
-0.16 (-0.96%)
GOLD
4315.7
Daily:
15.6 (0.36%)
Weekly:
109.0 (2.59%)
COPPER
5.34
Daily:
0.06 (1.1%)
Weekly:
0.1 (1.93%)
Fibonacci Analysis
Current Price:
$56.5
Closest Support:
$56.35
0.27% below current price
Closest Resistance:
$58.73
3.95% above current price
Fibonacci Retracement Levels
0.0
$56.35
Support
0.236
$58.73
Resistance
0.382
$60.2
0.5
$61.38
0.618
$62.57
0.786
$64.27
1.0
$66.42
Fibonacci Extension Levels
1.272
$69.16
1.618
$72.64
2.0
$76.49
2.618
$82.71
ML Price Prediction
Current Price:
$56.49
Forecast Generated:
2025-12-16 00:04:26
Next Trading Day:
UP 0.03%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2025-12-16 | $56.51 | $54.81 | $58.21 |
| 2025-12-17 | $56.53 | $54.83 | $58.23 |
| 2025-12-18 | $56.59 | $54.89 | $58.29 |
| 2025-12-19 | $56.69 | $55.0 | $58.39 |
| 2025-12-20 | $56.75 | $55.05 | $58.45 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price increase of ~0.03% for the next trading day (2025-12-16), reaching $56.51.
- The 5-day forecast suggests relatively stable prices between 2025-12-16 and 2025-12-20.
- The average confidence interval width is ~6.0% of the predicted price, indicating model uncertainty.
- SIGNAL: Bullish signal, moderate uncertainty.
AI Analysis
For Energy Traders:
The recent decline in crude oil prices, with the $65.20/b for the OPEC Reference Basket and $60.07/b for NYMEX WTI, indicates a bearish sentiment in the market. The Brent-WTI spread has narrowed to $3.88/b, suggesting a convergence in pricing dynamics that could present short-term trading opportunities.
The market structure remains in backwardation, reflecting healthy physical fundamentals. However, the bearish positioning by managed money traders, with a net position of -37,010 contracts, could lead to increased volatility. Traders should monitor key resistance levels around $63.95/b for Brent and $60.07/b for WTI, as any breach could signal further declines.
For Producers (Oil & Gas Companies):
The current market dynamics suggest a need for cautious production planning. With bearish market sentiment and a decline in crude oil prices, producers may want to consider hedging strategies to mitigate risks associated with price fluctuations.
The increase in OECD commercial inventories, now at 2,845 mb, indicates a potential oversupply situation that could pressure prices further. Producers should closely monitor inventory levels and adjust production accordingly to avoid excess supply, particularly as demand forecasts remain stable but modest.
For Consumers (Industrial/Refineries/Transportation):
With crude prices declining to around $60.07/b, consumers in the industrial and refining sectors may experience potential cost benefits in the short term. However, the supply reliability risks stemming from geopolitical tensions and fluctuating inventories should be considered in procurement strategies.
The recent drop in US crude imports to 5.6 mb/d and the increase in exports to 4.2 mb/d may affect supply dynamics. Consumers should evaluate their procurement strategies to ensure stable supply amidst potential disruptions and consider hedging against further price volatility.
For Commodity Professionals (Analysts, Consultants):
The Crude Oil market is currently characterized by bearish fundamentals, with a notable decline in prices across all major benchmarks. The balance of supply and demand remains delicate, with global oil demand growth forecast stable at 1.3 mb/d for 2025, while supply from non-DoC countries is projected to increase.
The negative sentiment reflected in news articles and CFTC positioning suggests that traders are anticipating further declines. Analysts should keep a close eye on geopolitical developments and inventory levels, as these will likely influence market dynamics moving forward.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Always consult with a financial advisor before making investment decisions.