57.35 is the key bull/bear line - what we are seeing is that news on Venezuela/US tension drives us up and news of Russia/Ukraine peace drives us down. When we pull back and look at some of the dynamics - demand is not holding up well (China is the only bright spot as they are building out their Strategic Petroleum Reserve but how long can that last?). Demand is very bearish and likely points to further downside. Supply on the other hand does not have as many barrels held back from the market - there is maybe 1 mmbpd held back from OPEC+ and every other spot in the world is producing as much as they can AT THIS PRICE LEVEL - remember that - if we rise to $80+ supply will increase, at $60 and below we will not see much growth. This week, I am watching 57.35 as this is the line we are dancing around, it appears that we seem headed for further downside to $53 next, this only reverses if 61.64 is retaken by the bulls.
ER
Crude Oil Radar
2025-12-31 00:05
Table of Contents
Brian's Thoughts
Today's Update
Crude oil is currently hovering around the critical $57.35 level, driven by news of geopolitical tensions, particularly between Venezuela and the U.S. While China is boosting demand through its Strategic Petroleum Reserve, overall demand remains bearish, with potential further downside to $53 if the bulls can't reclaim $61.64. Supply is ample, with OPEC+ holding back only about 1 million barrels per day. Keep an eye on these dynamics as we navigate the market—it's like dancing on a tightrope, but don't forget your safety net!
Market Summary
Technical Outlook
Moderately Bearish
Score:
-2/5
Short: BUY
|
Medium: BUY |
Long: SELL
International Prices
Brent:
$61.94
$1.3
WTI:
$58.08
$1.34
Spread:
$3.86
(Brent premium of $3.86)
Key Fundamentals
Crude Stocks:
N/A
(0)
Net Imports:
N/A
(0)
News Sentiment
BEARISH
Spec Positioning
Net Position:
74
Weekly Change:
6,804
Technical Analysis
Overall Technical Score (-5 to +5):
-2
(Moderately Bearish)
Current Price:
$58.06
Signal:
Moderately Bearish
Moving Averages (9/20)
BEARISH
MA(9): $57.37
MA(20): $57.82
Current Price is 58.06, 9 day MA 57.37, 20 day MA 57.82
MACD (12, 26, 9)
BULLISH
MACD: -0.3968
Signal: -0.5684
Days since crossover: 5
MACD crossed the line 5 days ago and is in a bullish setup
RSI (14)
NEUTRAL
Value: 49.85
Category: NEUTRAL
RSI is 49.85 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 8,185
Avg (20d): 203,357
Ratio: 0.04
Volume is lower versus 20 day average
Stochastic (14, 3)
BULLISH CROSS
%K: 75.68
%D: 60.91
Stochastic %K: 75.68, %D: 60.91. Signal: bullish cross
ADX (14)
WEAK TREND
ADX: 20.88
+DI: 13.79
-DI: 22.73
ADX: 20.88 (+DI: 13.79, -DI: 22.73). Trend: weak trend
Williams %R (14)
NEUTRAL
Value: -24.32
Williams %R: -24.32 (neutral zone)
Bollinger Bands (20, 2)
ABOVE MIDDLE
Upper: 60.25
Middle: 57.82
Lower: 55.39
Price vs BBands (20, 2): above middle. Upper: 60.25, Middle: 57.82, Lower: 55.39
Fundamental Analysis
| Category | Current | Last Week | Last Year | 3 Yr Avg |
|---|---|---|---|---|
| Crude Production (Thousand Barrels a Day) | 13825.0 | 13843.0 | 13604.0 | 12961.67 |
| Crude Imports (Thousand Barrels a Day) | 6086.0 | 6525.0 | 6649.0 | 6333.0 |
| Crude Exports (Thousand Barrels a Day) | 3616.0 | 4664.0 | 4895.0 | 3700.67 |
| Refinery Inputs (Thousand Barrels a Day) | 16776.0 | 16988.0 | 16611.0 | 16507.67 |
| Net Imports (Thousand Barrels a Day) | 2470.0 | 1861.0 | 1754.0 | 2632.33 |
| Commercial Crude Stocks (Thousand Barrels) | 424822.0 | 424417.0 | 421016.0 | 424099.67 |
| Crude & Products Total Stocks (Thousand Barrels) | 1688594.0 | 1687122.0 | 1626224.0 | 1598284.33 |
| Gasoline Stocks (Thousand Barrels) | 228489.0 | 225627.0 | 222037.0 | 224243.0 |
| Distillate Stocks (Thousand Barrels) | 118702.0 | 118500.0 | 118155.0 | 117479.33 |
International Price Analysis
International Price Summary
Brent crude (FEB 26) settled at $61.94, change $+1.3. WTI crude (FEB 26) settled at $58.08, change $+1.34. The Brent-WTI spread is currently $3.86 (Brent premium of $3.86). The Brent-WTI spread reflects differences in global vs. U.S. supply/demand dynamics, geopolitics, and transportation costs.
Brent Crude
$61.94
1.3
(FEB 26)
WTI Crude
$58.08
1.34
(FEB 26)
Brent-WTI Spread
$3.86
Brent premium of $3.86
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 delicate balance, with global demand projected to grow steadily while supply from non-DoC countries is also on the rise. The demand for crude from OPEC countries is expected to increase, but recent adjustments indicate a slight downward revision. This dynamic presents both challenges and opportunities for OPEC's production strategies moving forward.
Today's Critical Numbers
- World oil demand: 105.1 mb/d in 2025, +1.4% growth from 2024
- 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 supply-demand gap: 42.4 mb/d for 2025
- Regions driving the deficit: Primarily from the OECD
- Implications for OPEC: Adjustments in production levels may be necessary to align with the revised demand forecasts and maintain market stability.
Regional Powerhouses
- China's demand trajectory remains robust, with a forecasted growth of 4.8% in 2025.
- India's growth story is compelling, with a projected increase of 6.5% in oil demand for 2025.
- The Americas show resilience, with stable demand patterns despite global fluctuations.
- Europe faces challenges, primarily due to economic uncertainties impacting oil consumption.
What's Next
- 2025-2026 outlook: Global oil demand is expected to grow by 1.3 mb/d in 2025 and 1.4 mb/d in 2026.
- Risks include geopolitical tensions and economic slowdowns that could affect demand.
- Opportunities lie in increasing demand from emerging markets, particularly in Asia.
- Market-moving factors to watch include OPEC production decisions and global economic indicators.
Key Takeaways
- Most surprising data point: The demand for DoC crude has been revised down by 0.1 mb/d, indicating a cautious market outlook.
- Biggest risk factor: Potential economic slowdowns in key markets could dampen demand growth.
- Opportunity area: Emerging markets, particularly in Asia, present significant growth potential for oil consumption.
- Strategic recommendation: OPEC should consider flexible production strategies to adapt to changing demand forecasts and maintain market stability.
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 but Weakening
Positioning:
Normal Range
Report Date:
2025-12-16
Managed Money
74
Change: -6,804
0.0% of OI
Producer/Merchant
247,515
Change: -4,668
12.9% of OI
Swap Dealers
-320,087
Change: +10,593
-16.7% of OI
Open Interest
1,916,438
Change: 48,472
Summary Analysis:
CFTC Commitment of Traders Report (Disaggregated) as of 2025-12-16
Crude Oil Positioning (WTI-PHYSICAL - NYMEX):
Open Interest: 1,916,438 contracts (+48,472)
Managed Money Net Position: 74 contracts (0.0% of OI)
Weekly Change in Managed Money Net: -6,804 contracts
Producer/Merchant Net Position: 247,515 contracts
Swap Dealer Net Position: -320,087 contracts
Market Sentiment (based on Managed Money): Bullish 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:
-0.4
Confidence:
1.0
Articles Analyzed:
29
Last Updated:
2025-12-31 00:04:44
Commodity Sentiment
CRUDE_OIL
-0.4
Top News Topics
Demand (1 articles)
- Oil Gains on China Demand Outlook Trading Economics
Geopolitical (2 articles)
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
98.32
Daily:
0.28 (0.29%)
Weekly:
0.38 (0.39%)
US_10Y
4.13
Daily:
0.01 (0.34%)
Weekly:
-0.04 (-0.94%)
SP500
6896.24
Daily:
-9.5 (-0.14%)
Weekly:
-13.55 (-0.2%)
VIX
14.33
Daily:
0.13 (0.92%)
Weekly:
0.33 (2.36%)
GOLD
4354.3
Daily:
29.2 (0.68%)
Weekly:
-128.5 (-2.87%)
COPPER
5.69
Daily:
0.2 (3.59%)
Weekly:
0.21 (3.86%)
Fibonacci Analysis
Current Price:
$58.06
Closest Support:
$58.01
0.09% below current price
Closest Resistance:
$58.95
1.53% above current price
Fibonacci Retracement Levels
0.0
$54.98
0.236
$56.85
0.382
$58.01
Support
0.5
$58.95
Resistance
0.618
$59.89
0.786
$61.22
1.0
$62.92
Fibonacci Extension Levels
1.272
$65.08
1.618
$67.83
2.0
$70.86
2.618
$75.77
ML Price Prediction
Current Price:
$58.05
Forecast Generated:
2025-12-31 00:04:47
Next Trading Day:
UP 0.1%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2025-12-31 | $58.11 | $56.55 | $59.66 |
| 2026-01-01 | $58.3 | $56.75 | $59.85 |
| 2026-01-02 | $58.23 | $56.68 | $59.78 |
| 2026-01-03 | $58.18 | $56.63 | $59.73 |
| 2026-01-04 | $58.17 | $56.62 | $59.72 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price increase of ~0.10% for the next trading day (2025-12-31), reaching $58.11.
- The 5-day forecast suggests relatively stable prices between 2025-12-31 and 2026-01-04.
- The average confidence interval width is ~5.3% 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 (ORB) value dropping to an average of $65.20/b. The $3.88/b average Brent-WTI spread suggests a weakening market structure, but the backwardation in the forward curves indicates healthy physical oil market fundamentals.
Traders should be cautious of potential volatility as hedge funds maintain a bearish stance, with managed money net positioning showing a weakening bullish outlook. Key support levels may emerge around $60.00/b for WTI, while resistance could be observed near $65.00/b. Short-term opportunities may arise from fluctuations in geopolitical tensions and demand outlooks, particularly concerning China.
For Producers (Oil & Gas Companies):
The recent drop in crude prices necessitates a reassessment of production planning and hedging strategies. With OECD commercial crude inventories rising to 2,845 mb, producers should evaluate their output levels to avoid oversupply in a bearish market environment.
Additionally, the decline in DoC crude production and the anticipated growth in non-DoC liquids production from the US, Brazil, and Canada might impact pricing strategies. Producers must remain vigilant about market sentiment, especially as inventory levels could pressure prices further.
For Consumers (Industrial/Refineries/Transportation):
Consumers should prepare for potential fluctuations in input costs as WTI and Brent prices are currently experiencing a downward trend. The $60.07/b average for NYMEX WTI suggests potential procurement opportunities, but also highlights supply reliability risks due to geopolitical tensions and inventory levels.
Refineries may benefit from improved margins in middle distillates, but should also monitor crude import dynamics, especially as US crude exports hit an eight-month high. Strategic procurement or hedging may be essential to navigate these input cost fluctuations.
For Commodity Professionals (Analysts, Consultants):
The Crude Oil market is currently characterized by a bearish sentiment, driven by declining prices across major benchmarks. The anticipated global oil demand growth of 1.3 mb/d in 2025 remains stable; however, the increased OECD inventories and weakening managed money positioning suggest potential price pressures ahead.
Key driving factors include geopolitical risks that could influence supply dynamics and demand recovery, particularly in China. Analysts should focus on the divergence between supply growth from non-DoC producers and demand forecasts, as this may indicate shifts in market equilibrium and pricing strategies.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Please consult with a financial advisor for personalized guidance.