Crude traders wake up to a market that has decisively shifted from spreadsheet-watching to risk-pricing. WTI ~$65 and Brent ~$70 are sitting on the strongest weekly gains since October after price cleanly broke $61.64, opening a technical runway toward $66.84. The driver is not demand euphoria. It’s supply anxiety. The U.S. has expanded its military presence around Iran, reviving tail-risk chatter around disruptions tied to the Strait of Hormuz, which moves roughly 30% of global crude flows. At the same time, Russia all but dismissed near-term peace prospects with Ukraine, keeping sanctions pressure and export friction firmly in place. Add in ~10% U.S. production shut-ins from Winter Storm Fern and suddenly near-term balances look tighter, even as the IEA trimmed its 2026 surplus to ~3.7 MMBPD (although this is still massive). U.S. crude inventories are running ~3% below the 5-year average, floating storage slipped to ~113 MMbbl, and OPEC+ remains cautious, still holding back roughly 1.2 MMBPD despite restoring some cuts. The counterweight is demand. The EIA cut 2026 U.S. consumption, gasoline and distillate stocks remain above seasonal norms (Gasoline is MEGA bearish on stocks and Distillates are just slightly bearish on stocks), and the dollar has firmed. Translation: this rally is being powered by fear and positioning, not barrels being burned. If geopolitics escalate, $66.84 is in play quickly. If rhetoric cools and demand stays soft, this move risks stalling just as fast. For now, trend is up, conviction is rising, and the market is trading headlines with real mass behind them.
* Do we retrace down to $61.64 or finally test $66.84
* Iran seems to be the only key to bull/bear right now
* Fundamentals are pointed very bearish unless supply gets disrupted.
ER
Crude Oil Radar
2026-01-31 23:55
Table of Contents
Brian's Thoughts
Today's Update
Crude oil markets have shifted into risk-pricing, with WTI around $65 and Brent at $70, marking significant weekly gains fueled by supply anxiety rather than demand excitement. Concerns over U.S. military presence near Iran and ongoing geopolitical tensions with Russia are tightening near-term balances, despite the IEA's forecast of a 3.7 MMBPD surplus by 2026. While crude inventories are below the 5-year average, bearish fundamentals loom unless supply disruptions occur, making this rally more about fear than consumption. Watch for potential volatility as the geopolitical landscape evolves!
Market Summary
Technical Outlook
Neutral
Score:
1/5
Short: BUY
|
Medium: BUY |
Long: BUY
International Prices
Brent:
$70.69
$0.02
WTI:
$65.21
$0.21
Spread:
$5.48
(Brent premium of $5.48)
Key Fundamentals
Crude Stocks:
N/A
(0)
Net Imports:
N/A
(0)
News Sentiment
BULLISH
Spec Positioning
Net Position:
59,047
Weekly Change:
11,547
Technical Analysis
Overall Technical Score (-5 to +5):
1
(Neutral)
Current Price:
$65.21
Signal:
Neutral
Moving Averages (9/20)
BULLISH
MA(9): $62.03
MA(20): $60.26
Current Price is 65.21, 9 day MA 62.03, 20 day MA 60.26
MACD (12, 26, 9)
BULLISH
MACD: 1.4979
Signal: 0.9003
Days since crossover: 26
MACD crossed the line 26 days ago and is in a bullish setup
RSI (14)
NEUTRAL
Value: 67.92
Category: NEUTRAL
RSI is 67.92 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
HIGHER
Current: 560,007
Avg (20d): 338,789
Ratio: 1.65
Volume is higher versus 20 day average
Stochastic (14, 3)
OVERBOUGHT
%K: 84.18
%D: 89.17
Stochastic %K: 84.18, %D: 89.17. Signal: overbought
ADX (14)
STRONG UPTREND
ADX: 32.68
+DI: 29.55
-DI: 6.54
ADX: 32.68 (+DI: 29.55, -DI: 6.54). Trend: strong uptrend
Williams %R (14)
OVERBOUGHT
Value: -15.82
Williams %R: -15.82 (overbought)
Bollinger Bands (20, 2)
BREAKOUT UPPER
Upper: 65.17
Middle: 60.26
Lower: 55.35
Price vs BBands (20, 2): breakout upper. Upper: 65.17, Middle: 60.26, Lower: 55.35
Fundamental Analysis
| Category | Current | Last Week | Last Year | 3 Yr Avg |
|---|---|---|---|---|
| Crude Production (Thousand Barrels a Day) | 13696.0 | 13732.0 | 13477.0 | 12813.33 |
| Crude Imports (Thousand Barrels a Day) | 5642.0 | 6447.0 | 6745.0 | 6445.33 |
| Crude Exports (Thousand Barrels a Day) | 4589.0 | 3688.0 | 4515.0 | 3690.67 |
| Refinery Inputs (Thousand Barrels a Day) | 16209.0 | 16604.0 | 15522.0 | 14999.33 |
| Net Imports (Thousand Barrels a Day) | 1053.0 | 2759.0 | 2230.0 | 2754.67 |
| Commercial Crude Stocks (Thousand Barrels) | 423754.0 | 426049.0 | 411663.0 | 429908.67 |
| Crude & Products Total Stocks (Thousand Barrels) | 1715851.0 | 1722117.0 | 1621794.0 | 1601425.0 |
| Gasoline Stocks (Thousand Barrels) | 257213.0 | 256990.0 | 245898.0 | 245862.33 |
| Distillate Stocks (Thousand Barrels) | 132921.0 | 132592.0 | 128945.0 | 124112.0 |
International Price Analysis
International Price Summary
Brent crude (MAR 26) settled at $70.69, change $-0.02. WTI crude (MAR 26) settled at $65.21, change $-0.21. The Brent-WTI spread is currently $5.48 (Brent premium of $5.48). The Brent-WTI spread reflects differences in global vs. U.S. supply/demand dynamics, geopolitics, and transportation costs.
Brent Crude
$70.69
0.02
(MAR 26)
WTI Crude
$65.21
0.21
(MAR 26)
Brent-WTI Spread
$5.48
Brent premium of $5.48
OPEC Analysis
Supply-Demand Balance
China Oil Demand Trend
India Oil Demand Trend
United States Oil Demand Trend
Year-over-Year Market Analysis
OPEC Countries Production
Data Sources Used:
Supply Balance
China Data
India Data
US Data
World Demand
105.14
mb/d
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
Crude Oil Price Movements
In December, the OPEC Reference Basket (ORB) value dropped by $2.72/b, month-on-month (m-o-m), to average $61.74/b. The ICE Brent front-month contract dropped by $2.03/b, m-o-m, to average $61.63/b, while the NYMEX WTI front-month contract fell by $1.61/b, m-o-m, to average $57.87/b. The GME Oman front-month contract decreased by $2.57/b, m-o-m, to average $61.96/b. The Brent–WTI front-month spread narrowed, dropping by $0.42/b, m-o-m, to average $3.76/b in December.
The forward curves of all major crude benchmarks remained in backwardation in December, indicating supportive physical crude market fundamentals and a positive short-term global supply–demand outlook. Despite persistent selling pressure in futures markets, the forward curves for ICE Brent and GME Oman flattened further, while the backwardation in NYMEX WTI strengthened slightly.
World Economy & Macroeconomic Backdrop
Global economic growth is forecast at 3.1% in 2026, unchanged from last month’s assessment, with an expected acceleration to 3.2% in 2027. Key economic forecasts include:
- US: 2.1% growth in 2026, 2.0% in 2027
- Eurozone: 1.2% growth in both 2026 and 2027
- Japan: 0.9% growth in both years
- China: 4.5% growth in both years
- India: 6.6% in 2026, 6.5% in 2027
- Brazil: 2.0% in 2026, rising to 2.2% in 2027
- Russia: 1.3% in 2026, increasing to 1.5% in 2027
This positive outlook is supported by normalization in global trade, fiscal support measures, and adjustments to monetary policies in major economies.
World Oil Demand Trends
The global oil demand growth forecast for 2026 remains at 1.4 mb/d, y-o-y, with the OECD expected to grow by 0.15 mb/d and the non-OECD by approximately 1.2 mb/d. In 2027, global oil demand is forecast to grow by about 1.3 mb/d, with the OECD growing by 0.1 mb/d and the non-OECD by around 1.2 mb/d.
World Oil Supply Analysis
Non-DoC liquids production is forecast to grow by about 0.6 mb/d, y-o-y, in both 2026 and 2027, driven primarily by Brazil, Canada, the US, and Argentina. Natural gas liquids (NGLs) and non-conventional liquids from DoC countries are expected to grow by 0.1 mb/d, reaching an average of 8.8 mb/d in 2026 and 8.9 mb/d in 2027. In December, crude oil production by DoC countries decreased by 238 tb/d, m-o-m, averaging about 42.83 mb/d.
Product Markets & Refining Operations
Refining margins dropped across all regions in December after a sharp upward trend in previous months. This decline was attributed to product inventory builds, particularly for transport fuels, amid seasonal demand pressures. Additionally, a decrease in European product flows to West Africa contributed to the margin drop. In Southeast Asia, rising domestic product supplies and firm availability from the Middle East also weighed on refining profitability.
Tanker Market & Freight Dynamics
Dirty tanker spot freight rates declined in December, following strong gains earlier in the year. VLCC spot freight rates dropped but remained strong due to continued demand for long-haul flows. Specific movements included:
- Middle East-to-East route: down 12%, m-o-m
- Middle East-to-West route: down 11%, m-o-m
- Suezmax rates on the US Gulf Coast to Europe: down 12%, m-o-m
- Aframax rates in the Cross-Med: down 4%, m-o-m
In the clean tanker market, spot freight rates experienced upward momentum due to increased long-haul demand, with rates on the Middle East-to-East route rising by 14%, m-o-m, and Mediterranean rates up by 6%, m-o-m.
Crude & Refined Products Trade Flows
In December, US crude imports remained stable at just under 6 mb/d, while crude exports increased by almost 10%, m-o-m. Key regional trends included:
- OECD Europe: crude imports increased, while product imports declined, and product exports reached the upper end of the 5-year range.
- Japan: crude imports averaged 2.4 mb/d, supported by regional product demand.
- China: crude imports jumped to 12.4 mb/d, a gain of around 9%, m-o-m, following the release of import quotas.
- India: crude imports remained above the five-year range at 5.1 mb/d, with increased product exports.
Commercial Stock Movements
Preliminary November 2025 data indicated that OECD commercial inventories rose by 4.0 mb, m-o-m, to 2,840 mb. This level is 77.6 mb higher than a year earlier but 101.5 mb below the 2015–2019 average. Key highlights include:
- Crude stocks rose by 8.1 mb to 1,346 mb, 39.1 mb higher than a year ago.
- Product stocks fell by 4.1 mb to 1,494 mb, 38.6 mb higher than a year ago.
- Days of forward cover increased by 0.2 days to 62.2 days.
Supply-Demand Balance & Market Outlook
Demand for DoC crude in 2026 remains unchanged at 43.0 mb/d, approximately 0.6 mb/d higher than in 2025. For 2027, demand is forecast to reach 43.6 mb/d, also around 0.6 mb/d higher than the 2026 forecast. The following table summarizes the supply-demand balance:
| Year | World Demand (mb/d) | Non-DoC Supply (mb/d) | DoC Requirement (mb/d) |
|---|---|---|---|
| 2026 | 106.5 | 63.5 | 43.0 |
| 2027 | 107.9 | 64.3 | 43.6 |
The analysis indicates a significant supply-demand gap, necessitating strategic production decisions to align with the projected demand for DoC crude. The market outlook suggests a continued need for careful management of production levels to ensure stability in the face of evolving demand 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:
Bullish and Strengthening
Positioning:
Normal Range
Report Date:
2026-01-27
Managed Money
59,047
Change: +11,547
2.9% of OI
Producer/Merchant
192,338
Change: -12,099
9.4% of OI
Swap Dealers
-307,386
Change: -5,902
-15.1% of OI
Open Interest
2,035,649
Change: 71,290
Summary Analysis:
CFTC Commitment of Traders Report (Disaggregated) as of 2026-01-27
Crude Oil Positioning (WTI-PHYSICAL - NYMEX):
Open Interest: 2,035,649 contracts (+71,290)
Managed Money Net Position: 59,047 contracts (2.9% of OI)
Weekly Change in Managed Money Net: +11,547 contracts
Producer/Merchant Net Position: 192,338 contracts
Swap Dealer Net Position: -307,386 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:
0.75
Confidence:
1.0
Articles Analyzed:
42
Last Updated:
2026-01-31 23:54:10
Commodity Sentiment
CRUDE_OIL
0.75
Top News Topics
Supply (1 articles)
- Oil Prices Can Stay High Despite Oversupply — Market Talk Dow Jones Newswires
Geopolitical (2 articles)
- Oil Futures Make Headway on Geopolitical Risk — Market Talk Dow Jones Newswires
- Geopolitical Risk Premium Gives Oil A Further Lift — Market Talk Dow Jones Newswires
Weather (2 articles)
- New England Relied on Petroleum-Fired Generation During Storm — Market Talk Dow Jones Newswires
- Oil Extends Gains on Iran Risks, U.S. Winter Storm Disruptions — Market Talk Dow Jones Newswires
Economic Analysis
Economic Sentiment Summary
NEGATIVE - Economic indicators showing headwinds
Dollar Impact:
Strong USD may pressure commodity prices
Industrial Demand:
Weaker industrial demand signals
Interest Rate Impact:
Rising rates may impact energy demand
Risk Sentiment:
Low market volatility/risk appetite
Economic Indicators
USD_INDEX
96.99
Daily:
0.71 (0.74%)
Weekly:
-0.05 (-0.05%)
US_10Y
4.24
Daily:
0.01 (0.33%)
Weekly:
0.03 (0.66%)
SP500
6939.03
Daily:
-29.98 (-0.43%)
Weekly:
-11.2 (-0.16%)
VIX
17.44
Daily:
0.56 (3.32%)
Weekly:
1.29 (7.99%)
GOLD
4713.9
Daily:
-604.5 (-11.37%)
Weekly:
-365.8 (-7.2%)
COPPER
5.9
Daily:
-0.28 (-4.51%)
Weekly:
-0.09 (-1.45%)
Fibonacci Analysis
Current Price:
$65.21
Closest Support:
$64.02
1.82% below current price
Closest Resistance:
$66.48
1.95% above current price
Fibonacci Retracement Levels
0.0
$54.98
0.236
$57.69
0.382
$59.37
0.5
$60.73
0.618
$62.09
0.786
$64.02
Support
1.0
$66.48
Resistance
Fibonacci Extension Levels
1.272
$69.61
1.618
$73.59
2.0
$77.98
2.618
$85.09
ML Price Prediction
Current Price:
$65.21
Forecast Generated:
2026-01-31 23:54:13
Next Trading Day:
DOWN 0.1%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2026-01-31 | $65.15 | $62.87 | $67.43 |
| 2026-02-01 | $65.01 | $62.73 | $67.3 |
| 2026-02-02 | $64.74 | $62.46 | $67.03 |
| 2026-02-03 | $64.68 | $62.4 | $66.97 |
| 2026-02-04 | $64.68 | $62.4 | $66.97 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price decrease of ~0.10% for the next trading day (2026-01-31), reaching $65.15.
- The 5-day forecast suggests relatively stable prices between 2026-01-31 and 2026-02-04.
- The average confidence interval width is ~7.0% of the predicted price, indicating model uncertainty.
- SIGNAL: Bearish signal, moderate uncertainty.
AI Analysis
For Energy Traders:
The recent decline in crude oil prices indicates a potential shift in market dynamics, with the OPEC Reference Basket dropping to an average of $61.74/b. The Brent-WTI spread has narrowed to $3.76/b, reflecting changing supply-demand dynamics and geopolitical factors. Traders should be cautious of volatility as futures markets exhibit selling pressure despite supportive physical market fundamentals.
With the forward curves in backwardation, there could be short-term opportunities for traders to capitalize on price fluctuations. Monitoring Fibonacci levels will be critical for identifying potential support and resistance points, especially as market sentiment remains strong with a sentiment score of +0.750.
For Producers (Oil & Gas Companies):
The current inventory levels indicate a complex landscape for production planning. With OECD crude stocks rising by 8.1 mb, producers should evaluate their hedging strategies to mitigate potential price declines. The forecast for non-DoC liquids production growth remains steady at 0.6 mb/d, driven by key markets like Brazil and Canada, which could influence competitive positioning.
Additionally, the positive sentiment in the market, driven by expected demand growth of 1.4 mb/d in 2026, may provide some reassurance. Producers should remain agile in adjusting output levels to align with market conditions and demand forecasts.
For Consumers (Industrial/Refineries/Transportation):
Fluctuations in crude oil prices, currently averaging $61.74/b, could lead to input cost volatility for consumers. The recent increase in U.S. crude exports by almost 10% m-o-m may affect procurement strategies and supply reliability.
Furthermore, geopolitical risks highlighted in recent news could introduce additional supply reliability risks. Consumers should consider maintaining flexible procurement strategies and possibly enhancing hedging measures to mitigate exposure to sudden price spikes or supply disruptions.
For Commodity Professionals (Analysts, Consultants):
The Crude Oil market exhibits a strong bullish sentiment with a sentiment score of +0.750. Key driving factors include a forecasted global oil demand growth of 1.4 mb/d for 2026, alongside steady economic growth projections across major economies.
However, with increased inventories and a narrowing Brent-WTI spread, analysts should monitor for potential shifts in market dynamics. The positioning data indicates a strengthening managed money net position, which could signal sustained upward price momentum if trends continue. Overall, the balance between supply and demand remains delicate, warranting close observation for any shifts in this evolving landscape.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Please consult with a financial advisor for specific investment decisions.