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
2025-12-22 00:05
Table of Contents
Brian's Thoughts
Today's Update
Crude oil markets are currently grappling with oversupply concerns as OPEC+ ramps up production despite underwhelming output. Demand remains tepid, particularly with China stockpiling crude for its SPR, leading to a supply-demand imbalance. Recent geopolitical tensions have offered fleeting support, but prices hover around critical levels, with WTI potentially falling into the $50s. Analysts suggest that while short-term weakness persists, structural price increases could emerge by late 2026 as non-OPEC production faces growth challenges.
Market Summary
Technical Outlook
Moderately Bearish
Score:
-3/5
Short: SELL
|
Medium: SELL |
Long: SELL
International Prices
Brent:
$60.47
$0.65
WTI:
$56.66
$0.51
Spread:
$3.81
(Brent premium of $3.81)
Key Fundamentals
Crude Stocks:
N/A
(0)
Net Imports:
N/A
(0)
News Sentiment
BULLISH
Spec Positioning
Net Position:
6,878
Weekly Change:
41,646
Technical Analysis
Overall Technical Score (-5 to +5):
-3
(Moderately Bearish)
Current Price:
$57.05
Signal:
Moderately Bearish
Moving Averages (9/20)
BEARISH
MA(9): $56.82
MA(20): $57.96
Current Price is 57.05, 9 day MA 56.82, 20 day MA 57.96
MACD (12, 26, 9)
BEARISH
MACD: -0.8589
Signal: -0.7361
Days since crossover: 8
MACD crossed the line 8 days ago and is in a bearish setup
RSI (14)
NEUTRAL
Value: 43.71
Category: NEUTRAL
RSI is 43.71 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 12,695
Avg (20d): 213,665
Ratio: 0.06
Volume is lower versus 20 day average
Stochastic (14, 3)
BULLISH CROSS
%K: 37.5
%D: 29.71
Stochastic %K: 37.5, %D: 29.71. Signal: bullish cross
ADX (14)
WEAK TREND
ADX: 23.12
+DI: 10.7
-DI: 22.78
ADX: 23.12 (+DI: 10.7, -DI: 22.78). Trend: weak trend
Williams %R (14)
NEUTRAL
Value: -62.5
Williams %R: -62.5 (neutral zone)
Bollinger Bands (20, 2)
BELOW MIDDLE
Upper: 60.5
Middle: 57.96
Lower: 55.42
Price vs BBands (20, 2): below middle. Upper: 60.5, Middle: 57.96, Lower: 55.42
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 $60.47, change $+0.65. WTI crude (JAN 26) settled at $56.66, change $+0.51. The Brent-WTI spread is currently $3.81 (Brent premium of $3.81). The Brent-WTI spread reflects differences in global vs. U.S. supply/demand dynamics, geopolitics, and transportation costs.
Brent Crude
$60.47
0.65
(FEB 26)
WTI Crude
$56.66
0.51
(JAN 26)
Brent-WTI Spread
$3.81
Brent premium of $3.81
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 facing a supply-demand imbalance, with a projected demand for DoC crude at 42.4 mb/d in 2025, reflecting a modest increase of 0.3 mb/d from 2024. Global oil demand is expected to grow by 1.3 mb/d in 2025, driven primarily by non-OECD countries. The ongoing economic stability, particularly in emerging markets, will play a crucial role in shaping future demand dynamics.
Today's Critical Numbers
- World demand: 105.1 mb/d
- OECD demand: 0.1 mb/d growth
- Non-OECD demand: 1.2 mb/d growth
- China's demand growth: 4.8% for 2025
- India's demand growth: 6.5% for 2025
Supply vs Demand Gap Analysis
- Current gap size: 42.4 mb/d
- Regions driving the deficit: Primarily non-OECD countries, with significant contributions from China and India
- Implications for OPEC production decisions: OPEC may need to adjust production levels to balance the market and respond to growing demand from non-OECD regions.
Regional Powerhouses
- China's demand trajectory remains robust, with forecasts indicating a growth rate of 4.8% for 2025.
- India's growth story is equally compelling, with demand expected to rise by 6.5% in 2025, positioning it as a key player in the global oil market.
- The Americas show resilience, with stable demand patterns despite fluctuations in production.
- Europe faces challenges with stagnant demand growth, necessitating strategic adjustments in energy policies.
What's Next
- The 2025-2026 outlook suggests continued demand growth, with global oil demand increasing by approximately 1.4 mb/d in 2026.
- Risks include geopolitical tensions and potential supply chain disruptions that could impact production and pricing.
- Market-moving factors to watch include economic performance in China and India, as well as OPEC's production strategies in response to changing demand dynamics.
Key Takeaways
- Most surprising data point: The steady growth in India's oil demand, projected at 6.5% for 2025.
- Biggest risk factor: Geopolitical tensions that could disrupt supply chains and impact oil prices.
- Opportunity area: Increased investment in refining capacity in emerging markets, particularly in Asia.
- Strategic recommendation: OPEC should consider adjusting production levels to align with the growing demand from non-OECD countries.
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
BULLISH
Average Polarity:
0.6
Confidence:
1.0
Articles Analyzed:
32
Last Updated:
2025-12-22 00:04:27
Commodity Sentiment
CRUDE_OIL
0.6
Top News Topics
Supply (2 articles)
Demand (1 articles)
Infrastructure (2 articles)
Geopolitical (8 articles)
- Oil Gains Amid Rising Geopolitical Tensions Trading Economics
- 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 Extends Gains With Market Watching Venezuela, Ukraine-Russia — Market Talk Dow Jones Newswires
- Crude Futures Rise on Venezuela, Russia Supply Concerns — 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:
-0.0 (-0.0%)
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
4431.6
Daily:
70.2 (1.61%)
Weekly:
127.1 (2.95%)
COPPER
5.54
Daily:
0.1 (1.85%)
Weekly:
0.25 (4.79%)
Fibonacci Analysis
Current Price:
$57.05
Closest Support:
$54.98
3.63% below current price
Closest Resistance:
$57.44
0.68% above current price
Fibonacci Retracement Levels
0.0
$54.98
Support
0.236
$57.44
Resistance
0.382
$58.96
0.5
$60.19
0.618
$61.42
0.786
$63.17
1.0
$65.4
Fibonacci Extension Levels
1.272
$68.23
1.618
$71.84
2.0
$75.82
2.618
$82.26
ML Price Prediction
Current Price:
$56.66
Forecast Generated:
2025-12-22 00:04:30
Next Trading Day:
UP 0.36%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2025-12-20 | $56.87 | $55.1 | $58.63 |
| 2025-12-21 | $56.91 | $55.14 | $58.67 |
| 2025-12-22 | $56.86 | $55.1 | $58.62 |
| 2025-12-23 | $56.8 | $55.03 | $58.56 |
| 2025-12-24 | $56.74 | $54.98 | $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 $56.87.
- 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:
The crude oil market is currently experiencing bearish sentiment, as indicated by the drop in prices across major benchmarks. The $65.20/b average for the OPEC Reference Basket represents a significant decline, suggesting potential support levels around the recent lows. The $3.88/b Brent-WTI spread indicates a slight narrowing, which could reflect shifts in supply-demand dynamics. Traders should be cautious of volatility given the bearish positioning of hedge funds and the potential for a market reversal, particularly if geopolitical tensions escalate. Short-term opportunities may arise from scalping within the backwardation of the forward curves, but awareness of external factors is critical.
For Producers (Oil & Gas Companies):
Producers should consider the current bearish sentiment in the market, which is reflected in the $60.07/b WTI price. With inventory levels showing an increase, particularly in OECD crude stocks, there may be implications for hedging strategies. The decrease in crude production by OPEC countries highlights the need for careful production planning to align with demand forecasts of approximately 1.3 mb/d growth in 2025. Companies should also monitor the fluctuations in the Brent-WTI spread as it could affect pricing strategies and profitability.
For Consumers (Industrial/Refineries/Transportation):
Consumers should brace for potential input cost fluctuations as crude prices hover around $60.07/b for WTI. The geopolitical landscape remains a concern, impacting supply reliability, especially with the recent sanctions affecting Venezuelan oil flows. The increase in product exports from the US could provide some relief, but procurement strategies should account for hedging against price volatility. Refineries may benefit from improved margins in middle distillates, but they must remain vigilant regarding inventory levels and seasonal demand changes.
For Commodity Professionals (Analysts, Consultants):
The Crude Oil market is currently characterized by a bearish outlook, driven by declining prices and a bearish sentiment among hedge funds. Key driving factors include supply-demand dynamics with a forecasted demand growth of 1.3 mb/d for 2025, but tempered by rising inventories. The backwardation in the forward curve suggests healthy physical market fundamentals despite the price drop. Analysts should pay close attention to geopolitical developments and their potential impact on both supply reliability and market sentiment.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Please consult with a financial advisor for investment decisions.