Crude is in a tricky place - the fundamentals are AWFULLY bearish. Motor gasoline stocks are setting new 5 year highs and meanwhile every global statistic around demand looks to be bearish as demand simply is not supporting the supply. IEA projects a 3.7 MMBPD oversupply into 2026, and while I see that number as being overly bearish, we are oversupplied - China is importing over a million barrels a day to fill their SPR - so we don’t NEED the supply that is being produced (at least not yet). Will economic growth help that? Currently the outlook on that is a NOPE - not gonna help as a global recession is being discussed and on the table. Crude has been rangebound between 57.35 and 61.64 since October and only broke above that range on US deploying military to the Middle East combined with tense rhetoric about potential Iranian strikes. After last week seeing WTI get over $66, crude simply reversed after calmer discussions of the US and Iranian discussions… but I would watch this as we could see some more activity here.
* Monday - we saw a selloff from 64.72 down to 61.64 which is the logical place to be - we did close above that key level.
* Tuesday - brought another concern on US-Iran tension and dollar weakness.
* Wednesday will likely indicate whether we look at 61.64 or have eyes for 66.84
ER
Crude Oil Radar
2026-02-03 23:54
Table of Contents
Brian's Thoughts
Today's Update
Crude oil finds itself in a bearish headlock, with fundamentals indicating an oversupply, particularly as U.S. motor gasoline stocks hit five-year highs. The IEA predicts a 3.7 MMBPD oversupply by 2026, while China’s SPR fills at over a million barrels a day, suggesting current production isn't needed. Recent tensions with Iran briefly lifted WTI above $66, but with economic growth faltering, expect a range-bound market around $61.64 to $62.40. Traders should watch for shifts in geopolitical tensions and demand indicators to navigate this complex landscape.
Market Summary
Technical Outlook
Moderately Bullish
Score:
2/5
Short: BUY
|
Medium: BUY |
Long: BUY
International Prices
Brent:
$70.7
$0.01
WTI:
$62.14
$3.07
Spread:
$8.56
(Brent premium of $8.56)
Key Fundamentals
Crude Stocks:
N/A
(0)
Net Imports:
N/A
(0)
News Sentiment
BEARISH
Spec Positioning
Net Position:
59,047
Weekly Change:
11,547
Technical Analysis
Overall Technical Score (-5 to +5):
2
(Moderately Bullish)
Current Price:
$63.84
Signal:
Moderately Bullish
Moving Averages (9/20)
BULLISH
MA(9): $62.59
MA(20): $60.78
Current Price is 63.84, 9 day MA 62.59, 20 day MA 60.78
MACD (12, 26, 9)
BULLISH
MACD: 1.4383
Signal: 1.0874
Days since crossover: 28
MACD crossed the line 28 days ago and is in a bullish setup
RSI (14)
NEUTRAL
Value: 59.68
Category: NEUTRAL
RSI is 59.68 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 14,416
Avg (20d): 330,130
Ratio: 0.04
Volume is lower versus 20 day average
Stochastic (14, 3)
BULLISH CROSS
%K: 66.07
%D: 64.82
Stochastic %K: 66.07, %D: 64.82. Signal: bullish cross
ADX (14)
STRONG UPTREND
ADX: 32.52
+DI: 23.9
-DI: 12.44
ADX: 32.52 (+DI: 23.9, -DI: 12.44). Trend: strong uptrend
Williams %R (14)
NEUTRAL
Value: -33.93
Williams %R: -33.93 (neutral zone)
Bollinger Bands (20, 2)
ABOVE MIDDLE
Upper: 65.65
Middle: 60.78
Lower: 55.9
Price vs BBands (20, 2): above middle. Upper: 65.65, Middle: 60.78, Lower: 55.9
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 $70.7, change $+0.01. WTI crude (MAR 26) settled at $62.14, change $-3.07. The Brent-WTI spread is currently $8.56 (Brent premium of $8.56). The Brent-WTI spread reflects differences in global vs. U.S. supply/demand dynamics, geopolitics, and transportation costs.
Brent Crude
$70.7
0.01
(MAR 26)
WTI Crude
$62.14
3.07
(MAR 26)
Brent-WTI Spread
$8.56
Brent premium of $8.56
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 decreased 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 also saw a decline of $2.57/b, m-o-m, averaging $61.96/b. The Brent–WTI front-month spread decreased 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 in December, 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, and is expected to accelerate to 3.2% in 2027. This positive outlook is supported by normalization in global trade, fiscal support measures, and adjustments to monetary policies in major economies.
- US: Economic growth forecast at 2.1% for 2026 and 2% for 2027.
- Eurozone: Growth forecast at 1.2% for both 2026 and 2027.
- Japan: Growth forecast at 0.9% for both years.
- China: Growth forecast remains at 4.5% for 2026 and similar for 2027.
- India: Growth forecast at 6.6% for 2026 and 6.5% for 2027.
- Brazil: Growth forecast at 2.0% for 2026, rising to 2.2% in 2027.
- Russia: Revised down slightly to 1.3% for 2026, forecast to reach 1.5% in 2027.
World Oil Demand Trends
The global oil demand growth forecast for 2026 remains at 1.4 mb/d, y-o-y, unchanged from last month’s assessment. The OECD is expected to grow by 0.15 mb/d, while the non-OECD is forecast to grow by around 1.2 mb/d. For 2027, global oil demand is projected to grow by about 1.3 mb/d, y-o-y.
- OECD: Growth forecast of 0.1 mb/d for 2027.
- Non-OECD: Growth forecast remains at around 1.2 mb/d for both years.
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, primarily driven 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 in both years.
- DoC crude production decreased by 238 tb/d in December, averaging about 42.83 mb/d.
Product Markets & Refining Operations
Refining margins dropped across all regions in December, following a sharp upward trend in previous months. This decline was attributed to product inventory builds, particularly for transport fuels, amid seasonal demand-side pressures.
- In the Northern Hemisphere, European product flows to West Africa decreased, impacting margins.
- Southeast Asia faced rising domestic product supplies and softening export incentives.
Tanker Market & Freight Dynamics
Dirty tanker spot freight rates declined in December after strong gains earlier in the year.
- VLCC spot freight rates dropped but remained strong due to continued demand for long-haul flows.
- Suezmax rates fell by 12%, m-o-m, while Aframax rates experienced a more moderate decline of 4%, m-o-m.
- In the clean tanker market, spot freight rates increased by 14%, m-o-m, on the Middle East-to-East route.
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.
- OECD Europe saw an increase in crude imports, while product imports declined.
- China's crude imports rose to 12.4 mb/d, a gain of around 9%, m-o-m.
- India's crude imports remained above the five-year range, averaging 5.1 mb/d.
Commercial Stock Movements
Preliminary November 2025 data show that OECD commercial inventories rose by 4.0 mb, m-o-m, to stand at 2,840 mb.
- Crude stocks rose by 8.1 mb, while product stocks fell by 4.1 mb, m-o-m.
- OECD crude oil commercial stocks stood at 1,346 mb, 39.1 mb higher than a year ago.
- Days of forward cover increased by 0.2 days, m-o-m, to 62.2 days.
Supply-Demand Balance & Market Outlook
Demand for DoC crude in 2026 remains at 43.0 mb/d, about 0.6 mb/d higher than in 2025. For 2027, demand is forecast to reach 43.6 mb/d.
| 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 supply-demand gap analysis indicates a requirement for DoC crude to meet the projected demand of 106.5 mb/d in 2026, with non-DoC supply estimated at 63.5 mb/d, resulting in a DoC requirement of 43.0 mb/d. This gap highlights the strategic importance of production decisions moving forward to ensure 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 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
BEARISH
Average Polarity:
-0.6
Confidence:
1.0
Articles Analyzed:
44
Last Updated:
2026-02-03 23:53:53
Commodity Sentiment
CRUDE_OIL
-0.6
Top News Topics
Supply (1 articles)
Demand (1 articles)
- Iranian Crude Exports Slump in January, Kpler Says — Market Talk Dow Jones Newswires
Geopolitical (5 articles)
- Crude Picks Up As U.S.-India Trade Deal to Affect Russian Oil — Market Talk Dow Jones Newswires
- Russia Likely to Struggle to Place Oil If India Halts Purchases — Market Talk Dow Jones Newswires
- Oil Extends Drop on Easing Geopolitical Tensions Trading Economics
- PRESIDENT TRUMP POSTS USA WILL CUT TARIFFS ON INDIA GOODS TO 18% VS 50%; INDIA TO STOP BUYING RUSSIA OIL Mace News
- Crude Prices Tumble on Dollar Strength and Easing Geopolitical Risks Barchart
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:
Rising rates may impact energy demand
Risk Sentiment:
Low market volatility/risk appetite
Economic Indicators
USD_INDEX
97.37
Daily:
-0.24 (-0.25%)
Weekly:
0.92 (0.95%)
US_10Y
4.27
Daily:
-0.0 (-0.02%)
Weekly:
0.02 (0.54%)
SP500
6917.81
Daily:
-58.63 (-0.84%)
Weekly:
-60.22 (-0.86%)
VIX
18.0
Daily:
1.66 (10.16%)
Weekly:
1.65 (10.09%)
GOLD
5090.0
Daily:
467.5 (10.11%)
Weekly:
-211.6 (-3.99%)
COPPER
6.04
Daily:
0.24 (4.09%)
Weekly:
0.15 (2.49%)
Fibonacci Analysis
Current Price:
$63.84
Closest Support:
$62.09
2.74% below current price
Closest Resistance:
$64.02
0.28% 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
Support
0.786
$64.02
Resistance
1.0
$66.48
Fibonacci Extension Levels
1.272
$69.61
1.618
$73.59
2.0
$77.98
2.618
$85.09
ML Price Prediction
Current Price:
$63.21
Forecast Generated:
2026-02-03 23:53:56
Next Trading Day:
DOWN 0.62%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2026-02-04 | $62.82 | $60.21 | $65.42 |
| 2026-02-05 | $62.78 | $60.18 | $65.38 |
| 2026-02-06 | $63.13 | $60.53 | $65.73 |
| 2026-02-07 | $63.09 | $60.49 | $65.7 |
| 2026-02-08 | $63.12 | $60.51 | $65.72 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price decrease of ~0.62% for the next trading day (2026-02-04), reaching $62.82.
- The 5-day forecast suggests relatively stable prices between 2026-02-04 and 2026-02-08.
- The average confidence interval width is ~8.3% of the predicted price, indicating model uncertainty.
- SIGNAL: Bearish signal, moderate uncertainty.
AI Analysis
For Energy Traders:
The recent bearish sentiment in the market, reflected by a sentiment score of -0.600, suggests caution in trading strategies. The price movements indicate a decline in the OPEC Reference Basket to an average of $61.74/b with $3.76/b spread between Brent and WTI, which could present both risk factors and opportunities for short-term trades.
The support level for WTI appears to be around $57.87/b while resistance may be seen at approximately $62.14/b. Traders should monitor the Brent-WTI spread for indications of market dynamics, particularly in light of geopolitical developments that could influence supply and demand.
For Producers (Oil & Gas Companies):
With the forecasted balance of supply and demand for DoC crude at 43.0 mb/d in 2026, producers should consider adjusting production plans accordingly. The drop in crude production by DoC countries to 42.83 mb/d indicates potential risks in maintaining market share.
Given the current inventory levels and the increase in crude exports by the US, hedging strategies should be evaluated to mitigate price volatility. The negative news sentiment regarding demand, particularly from Iran, may further complicate the market landscape, suggesting a need for cautious operational adjustments.
For Consumers (Industrial/Refineries/Transportation):
Consumers should prepare for potential fluctuations in input costs, particularly with WTI trading at $57.87/b and Brent at $61.63/b. The bearish sentiment in the market indicates that procurement strategies may need to be agile to navigate price changes effectively.
Additionally, with geopolitical tensions easing, supply reliability may improve, but the increase in global oil demand is still uncertain. Consumers should monitor inventory levels closely, as the rise in OECD commercial stocks could signal upcoming price adjustments.
For Commodity Professionals (Analysts, Consultants):
The Crude Oil market is currently influenced by several key factors: a bearish sentiment driven by geopolitical developments, slowing demand forecasts, and a slight increase in supply from non-DoC countries. The balance of demand and supply remains delicate, with demand growth at 1.4 mb/d for 2026.
Analysts should focus on the evolving Brent-WTI spread, which reflects the shifting dynamics of global versus U.S. supply and demand. The sentiment surrounding demand, particularly with negative reports from Iran, suggests potential downward pressure on prices, warranting close monitoring of market trends and positioning shifts.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice or specific buy/sell recommendations.