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
2025-12-20 00:05
Table of Contents
Brian's Thoughts
Today's Update
Crude Oil markets have been under pressure, driven by oversupply concerns as OPEC+ ramps up production despite falling short of targets. Weak global demand, particularly from China filling its Strategic Petroleum Reserve, exacerbates this imbalance. Recent geopolitical tensions have offered brief support, yet analysts predict near-term price weakness, potentially dropping WTI below critical levels around $57.35. Long-term, however, a structural price increase is anticipated by late 2026 as non-OPEC production requires higher prices to thrive.
Market Summary
Technical Outlook
Moderately Bearish
Score:
-3/5
Short: SELL
|
Medium: SELL |
Long: SELL
International Prices
Brent:
$59.82
$0.14
WTI:
$56.15
$0.21
Spread:
$3.67
(Brent premium of $3.67)
Key Fundamentals
Crude Stocks:
N/A
(0)
Net Imports:
N/A
(0)
News Sentiment
BEARISH
Spec Positioning
Net Position:
6,878
Weekly Change:
41,646
Technical Analysis
Overall Technical Score (-5 to +5):
-3
(Moderately Bearish)
Current Price:
$56.66
Signal:
Moderately Bearish
Moving Averages (9/20)
BEARISH
MA(9): $56.95
MA(20): $58.01
Current Price is 56.66, 9 day MA 56.95, 20 day MA 58.01
MACD (12, 26, 9)
BEARISH
MACD: -0.9134
Signal: -0.7054
Days since crossover: 7
MACD crossed the line 7 days ago and is in a bearish setup
RSI (14)
NEUTRAL
Value: 41.15
Category: NEUTRAL
RSI is 41.15 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 85,735
Avg (20d): 230,281
Ratio: 0.37
Volume is lower versus 20 day average
Stochastic (14, 3)
BULLISH CROSS
%K: 30.43
%D: 23.01
Stochastic %K: 30.43, %D: 23.01. Signal: bullish cross
ADX (14)
WEAK TREND
ADX: 22.13
+DI: 9.97
-DI: 23.37
ADX: 22.13 (+DI: 9.97, -DI: 23.37). Trend: weak trend
Williams %R (14)
NEUTRAL
Value: -69.57
Williams %R: -69.57 (neutral zone)
Bollinger Bands (20, 2)
BELOW MIDDLE
Upper: 60.52
Middle: 58.01
Lower: 55.5
Price vs BBands (20, 2): below middle. Upper: 60.52, Middle: 58.01, Lower: 55.5
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 $59.82, change $+0.14. WTI crude (JAN 26) settled at $56.15, change $+0.21. The Brent-WTI spread is currently $3.67 (Brent premium of $3.67). The Brent-WTI spread reflects differences in global vs. U.S. supply/demand dynamics, geopolitics, and transportation costs.
Brent Crude
$59.82
0.14
(FEB 26)
WTI Crude
$56.15
0.21
(JAN 26)
Brent-WTI Spread
$3.67
Brent premium of $3.67
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 navigating a delicate balance with global oil demand projected to grow by 1.3 mb/d in 2025, while supply from non-DoC countries is expected to increase by 0.9 mb/d. The demand for crude oil from OPEC countries is revised down, indicating potential challenges for OPEC's production strategies. With a current demand for DoC crude at 42.4 mb/d, OPEC faces critical decisions to align production with evolving market dynamics.
Today's Critical Numbers
- World oil demand: 105.1 mb/d in 2025, +1.4% from 2024
- OECD demand: +0.1 mb/d in 2025
- Non-OECD demand: +1.2 mb/d in 2025
- China's demand trajectory: 4.8% growth forecast for 2025
- India's growth story: 6.5% growth forecast for 2025
Supply vs Demand Gap Analysis
- Current gap size: 42.4 mb/d demand vs 62.7 mb/d supply, resulting in a surplus of 20.3 mb/d
- Regions driving the deficit: Demand is primarily driven by the non-OECD, particularly China and India
- Implications for OPEC: The downward revision in DoC crude demand suggests OPEC may need to adjust production levels to maintain market stability
Regional Powerhouses
- China's demand trajectory: Expected to grow by 4.8% in 2025, maintaining its position as a key consumer
- India's growth story: Projected to grow by 6.5% in 2025, indicating robust demand potential
- Americas' resilience: US crude exports reached an eight-month high, supporting overall supply
- Europe's challenges: OECD Europe is facing fluctuating imports, which could impact regional supply dynamics
What's Next
- 2025-2026 outlook: Global oil demand is expected to grow by 1.4 mb/d in 2026, with non-OECD regions leading the charge
- Risks and opportunities: Potential geopolitical tensions and economic shifts could impact supply chains and pricing
- Market-moving factors to watch: Refining margins, tanker rates, and crude import/export dynamics will be critical indicators
Key Takeaways
- Most surprising data point: The downward revision of DoC crude demand by 0.1 mb/d
- Biggest risk factor: Potential oversupply due to increased production from non-DoC countries
- Opportunity area: Growth in Indian oil demand presents a significant opportunity for OPEC
- Strategic recommendation: OPEC should consider adjusting production levels to align with the revised 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:
Bullish and Strengthening
Positioning:
Normal Range
Report Date:
2025-12-09
Managed Money
6,878
Change: +41,646
0.4% of OI
Producer/Merchant
252,183
Change: -21,069
13.5% of OI
Swap Dealers
-330,680
Change: +3,832
-17.7% of OI
Open Interest
1,867,966
Change: -46,701
Summary Analysis:
CFTC Commitment of Traders Report (Disaggregated) as of 2025-12-09
Crude Oil Positioning (WTI-PHYSICAL - NYMEX):
Open Interest: 1,867,966 contracts (-46,701)
Managed Money Net Position: 6,878 contracts (0.4% of OI)
Weekly Change in Managed Money Net: +41,646 contracts
Producer/Merchant Net Position: 252,183 contracts
Swap Dealer Net Position: -330,680 contracts
Market Sentiment (based on Managed Money): Bullish 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:
-0.6
Confidence:
1.0
Articles Analyzed:
64
Last Updated:
2025-12-20 00:05:02
Commodity Sentiment
CRUDE_OIL
-0.6
Top News Topics
Supply (1 articles)
Demand (2 articles)
Infrastructure (3 articles)
Geopolitical (13 articles)
- Crude Oil Prices Settle Higher on Heightened Geopolitical Risks Barchart
- Crude Oil Prices Rise on Geopolitical Risks and Energy Demand Optimism Barchart
- Oil prices climb as US blocks Venezuelan tankers, eyes on Russia-Ukraine talks Reuters
- Crude Oil Prices Supported by Geopolitical Tensions Barchart
- Geopolitical Tensions Support Crude Oil Prices Barchart
- Oil Prices Climb Amid Ongoing Geopolitical Tensions — Market Talk Dow Jones Newswires
- 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
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
98.6
Daily:
0.17 (0.17%)
Weekly:
0.45 (0.46%)
US_10Y
4.15
Daily:
0.03 (0.85%)
Weekly:
-0.03 (-0.74%)
SP500
6834.5
Daily:
59.74 (0.88%)
Weekly:
17.99 (0.26%)
VIX
14.91
Daily:
-1.96 (-11.62%)
Weekly:
-1.59 (-9.64%)
GOLD
4361.4
Daily:
21.9 (0.5%)
Weekly:
54.7 (1.27%)
COPPER
5.44
Daily:
0.07 (1.36%)
Weekly:
0.1 (1.89%)
Fibonacci Analysis
Current Price:
$56.66
Closest Support:
$54.98
2.97% below current price
Closest Resistance:
$57.68
1.8% 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:
$56.66
Forecast Generated:
2025-12-20 00:05:06
Next Trading Day:
UP 0.36%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2025-12-20 | $56.86 | $55.1 | $58.63 |
| 2025-12-21 | $56.91 | $55.15 | $58.67 |
| 2025-12-22 | $56.86 | $55.1 | $58.63 |
| 2025-12-23 | $56.8 | $55.04 | $58.57 |
| 2025-12-24 | $56.75 | $54.99 | $58.51 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price increase of ~0.36% for the next trading day (2025-12-20), reaching $56.86.
- The 5-day forecast suggests relatively stable prices between 2025-12-20 and 2025-12-24.
- 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:
Current market dynamics indicate a bearish sentiment with the OPEC Reference Basket averaging $65.20/b and a Brent-WTI spread at $3.67. The support levels may be tested as the market is in backwardation, suggesting potential volatility ahead.
Traders should monitor the Brent-WTI spread for insights into supply/demand dynamics, particularly as US crude exports reach an eight-month high, which could influence pricing. The resistance levels might be observed around the recent highs, while Fibonacci retracement levels could provide additional insights into potential price movements.
For Producers (Oil & Gas Companies):
With oil demand growth forecasted at about 1.3 mb/d for 2025, producers should consider adjusting their production planning to align with the bearish market sentiment reflected in the recent price drops. The 43.02 mb/d average production from OPEC countries indicates a tightening supply environment.
Producers should also evaluate their hedging strategies in light of the current market sentiment and rising inventory levels, as OECD commercial stocks increased by 6.0 mb. This could impact pricing and profitability in the near term.
For Consumers (Industrial/Refineries/Transportation):
Consumers should prepare for potential input cost fluctuations as WTI and Brent prices reflect a bearish outlook. The recent drop in crude prices may temporarily ease procurement costs, but geopolitical risks remain a concern affecting supply reliability.
With US crude exports at an eight-month high and OECD product stocks at 1,513 mb, procurement strategies should be reassessed to mitigate risks associated with potential supply disruptions, ensuring stable operations amidst market volatility.
For Commodity Professionals (Analysts, Consultants):
The current Crude Oil market presents a bearish outlook driven by fundamental shifts in supply and demand dynamics. Global oil demand growth remains stable, yet the recent price drops and increased inventories signal potential oversupply issues. The backwardation in futures indicates healthy physical market fundamentals, but with managed money traders adopting a bullish stance, the market may experience shifts.
Key driving factors include geopolitical tensions impacting supply routes and economic growth forecasts remaining steady. Analysts should closely monitor positioning data from CFTC reports to gauge market sentiment and potential shifts in price direction.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Always consult with a financial advisor before making investment decisions.