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
2025-12-19 00:05
Table of Contents
Brian's Thoughts
Today's Update
Crude oil prices are under pressure as oversupply concerns loom, exacerbated by OPEC+'s production resumption, despite actual output falling short. Demand remains tepid, particularly as China fills its strategic reserves. Recent price action shows WTI dipping below critical support levels, potentially heading toward the $52-$40 range. Analysts predict near-term weakness but foresee a structural price increase by late 2026, driven by non-OPEC supply challenges. Keep an eye on geopolitical tensions and demand shifts as potential market movers.
Market Summary
Technical Outlook
Moderately Bearish
Score:
-2/5
Short: SELL
|
Medium: SELL |
Long: SELL
International Prices
Brent:
$59.68
$0.76
WTI:
$55.94
$0.67
Spread:
$3.74
(Brent premium of $3.74)
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):
-2
(Moderately Bearish)
Current Price:
$55.89
Signal:
Moderately Bearish
Moving Averages (9/20)
BEARISH
MA(9): $57.17
MA(20): $58.12
Current Price is 55.89, 9 day MA 57.17, 20 day MA 58.12
MACD (12, 26, 9)
BEARISH
MACD: -0.9506
Signal: -0.6575
Days since crossover: 6
MACD crossed the line 6 days ago and is in a bearish setup
RSI (14)
NEUTRAL
Value: 36.1
Category: NEUTRAL
RSI is 36.1 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 9,194
Avg (20d): 238,381
Ratio: 0.04
Volume is lower versus 20 day average
Stochastic (14, 3)
OVERSOLD
%K: 16.49
%D: 13.04
Stochastic %K: 16.49, %D: 13.04. Signal: oversold
ADX (14)
WEAK TREND
ADX: 20.81
+DI: 10.77
-DI: 25.5
ADX: 20.81 (+DI: 10.77, -DI: 25.5). Trend: weak trend
Williams %R (14)
OVERSOLD
Value: -83.51
Williams %R: -83.51 (oversold)
Bollinger Bands (20, 2)
BELOW MIDDLE
Upper: 60.64
Middle: 58.12
Lower: 55.6
Price vs BBands (20, 2): below middle. Upper: 60.64, Middle: 58.12, Lower: 55.6
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 $59.68, change $+0.76. WTI crude (JAN 26) settled at $55.94, change $+0.67. The Brent-WTI spread is currently $3.74 (Brent premium of $3.74). The Brent-WTI spread reflects differences in global vs. U.S. supply/demand dynamics, geopolitics, and transportation costs.
Brent Crude
$59.68
0.76
(FEB 26)
WTI Crude
$55.94
0.67
(JAN 26)
Brent-WTI Spread
$3.74
Brent premium of $3.74
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 experiencing a notable shift with global oil demand projected to grow by 1.3 mb/d in 2025, driven primarily by non-OECD countries. Meanwhile, OPEC's crude production has seen a slight decline, indicating potential adjustments in output to balance the market. As the world navigates economic growth forecasts of 3.0% for 2025, the interplay between supply and demand will be crucial for OPEC's strategic decisions.
Today's Critical Numbers
- World oil demand: 105.1 mb/d in 2025
- OECD demand growth: +0.1 mb/d
- Non-OECD demand growth: +1.2 mb/d
- China's demand growth: 4.8% in 2025
- India's demand growth: 6.5% in 2025
Supply vs Demand Gap Analysis
- Current supply-demand gap: 42.4 mb/d in 2025
- Regions driving the deficit: Non-DoC liquids production is forecasted at 54.1 mb/d
- Implications for OPEC: The slight decrease in OPEC production suggests a need for strategic adjustments to maintain market stability.
Regional Powerhouses
- China's demand trajectory remains strong, with a forecasted growth of 4.8% in 2025.
- India's growth story is robust, expected to reach 6.5% in 2025, indicating rising consumption needs.
- The Americas show resilience with stable demand, supported by increased crude exports.
- Europe faces challenges with stagnant growth, necessitating careful monitoring of supply dynamics.
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 emerging markets, particularly in Asia, where demand is expected to surge.
- Market-moving factors to watch include OPEC's production decisions and global economic indicators.
Key Takeaways
- Most surprising data point: Non-OECD demand growth of +1.2 mb/d highlights shifting consumption patterns.
- Biggest risk factor: Geopolitical tensions could impact supply stability.
- Opportunity area: Increased demand from India presents a significant growth opportunity for OPEC.
- Strategic recommendation: OPEC should consider adjusting production levels to align with emerging demand trends.
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:
-0.7
Confidence:
1.0
Articles Analyzed:
75
Last Updated:
2025-12-19 00:04:36
Commodity Sentiment
CRUDE_OIL
-0.7
Top News Topics
Supply (8 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
Demand (3 articles)
Infrastructure (2 articles)
Geopolitical (12 articles)
- Crude Oil Prices Supported by Geopolitical Tensions Barchart
- Geopolitical Tensions Support Crude Oil Prices Barchart
- 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 Gains as Trump's Venezuela Blockade Raises Geopolitical Risks — Market Talk Dow Jones Newswires
- Russia-Ukraine Peace Efforts Send Crude to Near 5-Year Low — Market Talk Dow Jones Newswires
- Russia-Ukraine Peace Prospects Keep Oil Under Pressure — Market Talk Dow Jones Newswires
- 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:
Stable/lower rates may support demand
Risk Sentiment:
Low market volatility/risk appetite
Economic Indicators
USD_INDEX
98.55
Daily:
0.18 (0.18%)
Weekly:
0.15 (0.15%)
US_10Y
4.12
Daily:
-0.03 (-0.84%)
Weekly:
-0.08 (-1.86%)
SP500
6774.76
Daily:
53.33 (0.79%)
Weekly:
-52.65 (-0.77%)
VIX
16.87
Daily:
-0.75 (-4.26%)
Weekly:
2.02 (13.6%)
GOLD
4348.4
Daily:
0.9 (0.02%)
Weekly:
48.3 (1.12%)
COPPER
5.46
Daily:
0.09 (1.72%)
Weekly:
0.17 (3.26%)
Fibonacci Analysis
Current Price:
$55.89
Closest Support:
$54.98
1.63% below current price
Closest Resistance:
$57.68
3.2% 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:
$55.9
Forecast Generated:
2025-12-19 00:04:39
Next Trading Day:
UP 0.19%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2025-12-19 | $56.0 | $54.25 | $57.76 |
| 2025-12-20 | $56.2 | $54.45 | $57.95 |
| 2025-12-21 | $56.22 | $54.47 | $57.97 |
| 2025-12-22 | $56.2 | $54.44 | $57.95 |
| 2025-12-23 | $56.19 | $54.44 | $57.94 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price increase of ~0.19% for the next trading day (2025-12-19), reaching $56.00.
- The 5-day forecast suggests relatively stable prices between 2025-12-19 and 2025-12-23.
- The average confidence interval width is ~6.2% of the predicted price, indicating model uncertainty.
- SIGNAL: Bullish signal, moderate uncertainty.
AI Analysis
For Energy Traders:
The recent bearish sentiment in the crude oil market is underscored by a significant price drop in October, with the OPEC Reference Basket falling to an average of $65.20/b. Traders should note the support level around $60.00/b for WTI, while resistance can be observed near $65.00/b. The Brent-WTI spread at $3.88/b indicates ongoing supply-demand dynamics favoring Brent, suggesting potential short-term opportunities in spread trading.
Increased volatility is anticipated due to the bearish positioning of managed money, which is currently at -34,768 contracts. The market's sentiment is weak but may begin to stabilize, providing a window for cautious long positions if signs of recovery emerge.
For Producers (Oil & Gas Companies):
With the crude oil production from OPEC countries declining by 73 tb/d in October, producers must adjust their production planning accordingly. The balance between supply and demand is shifting, with a forecasted demand for DoC crude at 42.4 mb/d in 2025, indicating a need for strategic hedging against price fluctuations.
Additionally, the increase in OECD commercial inventories suggests a potential oversupply risk, which may further depress prices. Producers should consider utilizing financial instruments to hedge against potential downturns, especially given the bearish market sentiment reflected in recent news.
For Consumers (Industrial/Refineries/Transportation):
Consumers should prepare for potential input cost fluctuations as crude prices remain under pressure, currently averaging around $60.07/b for WTI. The supply reliability risks are heightened by geopolitical tensions and fluctuating inventories, particularly as U.S. crude exports reach an eight-month high of 4.2 mb/d.
Given the bearish sentiment in the market, procurement strategies should be revisited to optimize costs, especially in light of the expected demand growth in non-OECD countries. Hedging against price increases may be prudent as global oil demand forecasts remain stable.
For Commodity Professionals (Analysts, Consultants):
The crude oil market is currently exhibiting a bearish outlook, driven by declining prices across major benchmarks and a weakening market structure. Key factors influencing this sentiment include a stable global economic growth forecast of 3.0% and an anticipated demand growth of approximately 1.3 mb/d for 2025.
Analysts should closely monitor the risk factors associated with high inventories and geopolitical tensions, which could shift market dynamics. The current positioning of managed money suggests a potential for market reversal if bullish indicators emerge, necessitating ongoing evaluation of both technical and fundamental indicators.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Please conduct your own research or consult a financial advisor before making investment decisions.