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). The news of Russia-Ukraine Peace drops WTI below the critical 57.35 level and we close out the day in the mid 50s. This points to 52 and possibly down to the 40s.
ER
Crude Oil Radar
2025-12-18 00:06
Table of Contents
Brian's Thoughts
Today's Update
Crude oil prices are currently under pressure, largely due to oversupply concerns as OPEC+ resumes production despite not hitting targets. China's strong SPR purchases are dampening global demand, leading analysts to predict near-term price weakness, potentially pushing WTI below $52. However, geopolitical tensions, particularly around Venezuela, have spurred some price gains. The long-term outlook remains cautiously optimistic, with expectations of a structural price increase by late 2026 as non-OPEC supply struggles to meet demand.
Market Summary
Technical Outlook
Moderately Bearish
Score:
-3/5
Short: SELL
|
Medium: SELL |
Long: SELL
International Prices
Brent:
$58.92
$1.64
WTI:
$55.27
$1.55
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:
-34,768
Weekly Change:
2,242
Technical Analysis
Overall Technical Score (-5 to +5):
-3
(Moderately Bearish)
Current Price:
$56.24
Signal:
Moderately Bearish
Moving Averages (9/20)
BEARISH
MA(9): $57.67
MA(20): $58.31
Current Price is 56.24, 9 day MA 57.67, 20 day MA 58.31
MACD (12, 26, 9)
BEARISH
MACD: -0.8616
Signal: -0.5795
Days since crossover: 5
MACD crossed the line 5 days ago and is in a bearish setup
RSI (14)
NEUTRAL
Value: 38.17
Category: NEUTRAL
RSI is 38.17 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 26,583
Avg (20d): 236,951
Ratio: 0.11
Volume is lower versus 20 day average
Stochastic (14, 3)
BULLISH CROSS
%K: 22.83
%D: 12.77
Stochastic %K: 22.83, %D: 12.77. Signal: bullish cross
ADX (14)
NO TREND
ADX: 19.45
+DI: 10.38
-DI: 26.07
ADX: 19.45 (+DI: 10.38, -DI: 26.07). Trend: no trend
Williams %R (14)
NEUTRAL
Value: -77.17
Williams %R: -77.17 (neutral zone)
Bollinger Bands (20, 2)
BELOW MIDDLE
Upper: 60.61
Middle: 58.31
Lower: 56.01
Price vs BBands (20, 2): below middle. Upper: 60.61, Middle: 58.31, Lower: 56.01
Fundamental Analysis
| Category | Current | Last Week | Last Year | 3 Yr Avg |
|---|---|---|---|---|
| Crude Production (Thousand Barrels a Day) | 13843.0 | 13853.0 | 13631.0 | 13001.33 |
| Crude Imports (Thousand Barrels a Day) | 6525.0 | 6589.0 | 5984.0 | 6406.0 |
| Crude Exports (Thousand Barrels a Day) | 4664.0 | 4009.0 | 3099.0 | 4458.67 |
| Refinery Inputs (Thousand Barrels a Day) | 16988.0 | 16860.0 | 16659.0 | 16362.33 |
| Net Imports (Thousand Barrels a Day) | 1861.0 | 2580.0 | 2885.0 | 1947.33 |
| Commercial Crude Stocks (Thousand Barrels) | 424417.0 | 425691.0 | 421950.0 | 427644.0 |
| Crude & Products Total Stocks (Thousand Barrels) | 1687122.0 | 1684734.0 | 1628917.0 | 1613007.33 |
| Gasoline Stocks (Thousand Barrels) | 225627.0 | 220819.0 | 219689.0 | 224957.67 |
| Distillate Stocks (Thousand Barrels) | 118500.0 | 116788.0 | 121335.0 | 117702.67 |
International Price Analysis
International Price Summary
Brent crude (FEB 26) settled at $58.92, change $-1.64. WTI crude (JAN 26) settled at $55.27, change $-1.55. 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
$58.92
1.64
(FEB 26)
WTI Crude
$55.27
1.55
(JAN 26)
Brent-WTI Spread
$3.65
Brent premium of $3.65
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 nuanced balance between supply and demand, with global oil demand projected to grow by 1.3 mb/d in 2025. OPEC's crude production has seen a slight decrease, reflecting adjustments to market conditions. As we move into 2026, demand for OPEC crude is expected to rise, albeit at a cautious pace.
Today's Critical Numbers
- World oil demand: 105.1 mb/d in 2025 (+1.4%)
- OECD oil demand: 0.1 mb/d growth in 2025
- Non-OECD oil demand: 1.2 mb/d growth in 2025
- China's oil demand: 4.8% growth forecast for 2025
- India's oil demand: 6.5% growth forecast for 2025
Supply vs Demand Gap Analysis
- Current gap size: 42.4 mb/d in 2025
- Regions driving the deficit: Primarily from OPEC countries
- Implications for OPEC production decisions: OPEC may need to adjust production levels to align with the anticipated demand increase in 2026.
Regional Powerhouses
- China's demand trajectory remains robust, with a forecast growth of 4.8% in 2025.
- India's growth story is promising, with demand expected to rise by 6.5% in 2025, indicating strong economic activity.
- The Americas show resilience, with stable production levels and increasing exports.
- Europe faces challenges, particularly with fluctuating imports and refining margins.
What's Next
- 2025-2026 outlook: Global oil demand is expected to grow by 1.4 mb/d in 2026.
- Risks include geopolitical tensions and potential supply chain disruptions.
- Opportunities lie in increasing demand from emerging markets, particularly in Asia.
- Market-moving factors to watch: OPEC's production decisions and global economic growth trends.
Key Takeaways
- Most surprising data point: The demand for DoC crude is revised down by 0.1 mb/d, indicating a cautious market outlook.
- Biggest risk factor: Geopolitical tensions that could disrupt supply chains.
- Opportunity area: Increased oil demand from India and China presents growth potential for OPEC.
- Strategic recommendation: OPEC should consider maintaining flexible production strategies to adapt to changing market dynamics.
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 but Weakening
Positioning:
Normal Range
Report Date:
2025-12-02
Managed Money
-34,768
Change: +2,242
-1.8% of OI
Producer/Merchant
273,252
Change: -623
14.3% of OI
Swap Dealers
-334,512
Change: +4,551
-17.5% of OI
Open Interest
1,914,667
Change: 24,164
Summary Analysis:
CFTC Commitment of Traders Report (Disaggregated) as of 2025-12-02
Crude Oil Positioning (WTI-PHYSICAL - NYMEX):
Open Interest: 1,914,667 contracts (+24,164)
Managed Money Net Position: -34,768 contracts (-1.8% of OI)
Weekly Change in Managed Money Net: +2,242 contracts
Producer/Merchant Net Position: 273,252 contracts
Swap Dealer Net Position: -334,512 contracts
Market Sentiment (based on Managed Money): Bearish 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:
-0.6
Confidence:
1.0
Articles Analyzed:
63
Last Updated:
2025-12-18 00:05:34
Commodity Sentiment
CRUDE_OIL
-0.6
Top News Topics
Supply (9 articles)
- TotalEnergies Inks Deal To Supply Green Power To Google Data Centers In Malaysia dpa-AFX
- Oil settles near five-year low amid ample supply, Russia-Ukraine progress Reuters
- Oil Futures Fall Further on Oversupply Concerns — Market Talk Dow Jones Newswires
- Sugar Prices Pressured as India Boosts Sugar Production and Crude Oil Declines Barchart
- Oil Futures Extend Losses On Oversupply Worries — Market Talk Dow Jones Newswires
- Sugar Prices Decline on Higher Indian Production and Weakness in Crude Barchart
- Oil Futures Focused on Russia-Ukraine, Oversupply — Market Talk Dow Jones Newswires
- Oil Inches Higher But Ukraine Talks, Oversupply Concerns Cap Gains — Market Talk Dow Jones Newswires
- Oil prices fall as supply outlook offsets disruptions in Venezuelan flows Reuters
Demand (3 articles)
Infrastructure (1 articles)
Geopolitical (7 articles)
- Oil Extends Gains as Geopolitical Risks Mount Trading Economics
- Crude Prices Rise as Global Geopolitical Risks Escalate Barchart
- Rising Global Geopolitical Tensions Lift Crude Prices Barchart
- Oil Futures Extend Losses on Russia-Ukraine Peace Hopes — Market Talk Dow Jones Newswires
- Oil settles near five-year low amid ample supply, Russia-Ukraine progress Reuters
- Oil Falls Amid Prospects of Russia-Ukraine Peace Deal — Market Talk Dow Jones Newswires
- Oil Futures Focused on Russia-Ukraine, Oversupply — Market Talk Dow Jones Newswires
Economic Analysis
Economic Sentiment Summary
POSITIVE - Economic indicators generally supportive
Dollar Impact:
Strong USD may pressure commodity prices
Industrial Demand:
Strong industrial demand signals
Interest Rate Impact:
Rising rates may impact energy demand
Risk Sentiment:
Low market volatility/risk appetite
Economic Indicators
USD_INDEX
98.4
Daily:
0.25 (0.25%)
Weekly:
0.05 (0.05%)
US_10Y
4.15
Daily:
0.0 (0.05%)
Weekly:
0.01 (0.24%)
SP500
6721.43
Daily:
-78.83 (-1.16%)
Weekly:
-179.57 (-2.6%)
VIX
17.62
Daily:
1.14 (6.92%)
Weekly:
1.85 (11.73%)
GOLD
4361.0
Daily:
56.5 (1.31%)
Weekly:
75.5 (1.76%)
COPPER
5.4
Daily:
0.11 (2.08%)
Weekly:
-0.03 (-0.55%)
Fibonacci Analysis
Current Price:
$56.24
Closest Support:
$54.98
2.24% below current price
Closest Resistance:
$57.68
2.56% above current price
Fibonacci Retracement Levels
0.0
$54.98
Support
0.236
$57.68
Resistance
0.382
$59.35
0.5
$60.7
0.618
$62.05
0.786
$63.97
1.0
$66.42
Fibonacci Extension Levels
1.272
$69.53
1.618
$73.49
2.0
$77.86
2.618
$84.93
ML Price Prediction
Current Price:
$56.25
Forecast Generated:
2025-12-18 00:05:36
Next Trading Day:
DOWN 0.07%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2025-12-18 | $56.21 | $54.43 | $57.99 |
| 2025-12-19 | $56.33 | $54.55 | $58.11 |
| 2025-12-20 | $56.53 | $54.75 | $58.31 |
| 2025-12-21 | $56.52 | $54.74 | $58.3 |
| 2025-12-22 | $56.48 | $54.7 | $58.26 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price decrease of ~0.07% for the next trading day (2025-12-18), reaching $56.21.
- The 5-day forecast suggests relatively stable prices between 2025-12-18 and 2025-12-22.
- The average confidence interval width is ~6.3% of the predicted price, indicating model uncertainty.
- SIGNAL: Bearish signal, moderate uncertainty.
AI Analysis
For Energy Traders:
The Crude Oil market shows signs of bearish sentiment, with the OPEC Reference Basket dropping to an average of $65.20/b. The Brent-WTI spread averaged $3.88/b, indicating a slight narrowing, which may reflect shifting dynamics in supply and demand. Traders should monitor the resistance levels around $63.95/b for Brent and $60.07/b for WTI, as these levels could dictate short-term price action. Volatility may remain high due to ongoing geopolitical tensions and bearish market positioning, with managed money net positions showing a decrease to -34,768 contracts.
For Producers (Oil & Gas Companies):
Producers should consider the implications of rising inventory levels, which increased by 6.0 mb m-o-m, indicating potential oversupply in the market. The sentiment remains bearish, which could impact pricing strategies. With the $65.20/b average for the OPEC Reference Basket, hedging strategies may need to be revisited to mitigate risks associated with price volatility. Additionally, the production cuts from OPEC members, which saw a decrease of 73 tb/d in October, may affect future production planning.
For Consumers (Industrial/Refineries/Transportation):
Consumers should prepare for potential fluctuations in input costs as crude prices hover around $60.07/b for WTI and $63.95/b for Brent. The supply reliability risks are heightened due to geopolitical tensions and the increasing inventory levels. With US crude imports falling to 5.6 mb/d and exports rising to 4.2 mb/d, procurement strategies should be adjusted to secure favorable pricing and mitigate risks associated with supply disruptions.
For Commodity Professionals (Analysts, Consultants):
The Crude Oil market is currently influenced by a convergence of bearish fundamentals, including declining prices, increased inventory levels, and bearish sentiment reflected in the -34,768 contracts managed money positions. The outlook remains cautious, with global oil demand growth forecasted at 1.3 mb/d for 2025. Analysts should monitor the impact of geopolitical factors and OPEC's production strategies, as these will likely dictate market dynamics in the near term.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice or specific buy/sell recommendations.