Crude Oil Radar

OPEC Market Analysis

Crude Oil Price Movements

In January, the OPEC Reference Basket (ORB) value rose by $0.61/b, month-on-month (m-o-m), to average $62.31/b. The ICE Brent front-month contract increased by $3.10/b, m-o-m, to average $64.73/b, while the NYMEX WTI front-month contract rose by $2.39/b, m-o-m, to average $60.26/b. The GME Oman front-month contract also saw a rise of $0.83/b, m-o-m, averaging $62.79/b.

The Brent–WTI front-month spread increased by $0.71/b, m-o-m, to average $4.47/b. The forward curves for all major crude benchmarks strengthened, with both ICE Brent and NYMEX WTI moving into stronger backwardation. This shift was supported by oil supply outages, easing selling pressure from speculators, and robust physical market fundamentals. Speculative sentiment turned bullish, with hedge funds and other money managers sharply increasing their net long positions.

World Economy & Macroeconomic Backdrop

The global economic growth forecasts remain unchanged from last month’s assessment at 3.1% for 2026 and 3.2% for 2027. The US economic growth forecast has been slightly revised up to 2.2% for 2026, while remaining at 2% for 2027. The Eurozone's growth forecasts remain stable at 1.2% for both years. Japan's growth is projected at 0.9% for both 2026 and 2027, while China is expected to grow at 4.5% for both years. India's growth forecasts are set at 6.6% for 2026 and 6.5% for 2027. Brazil's economic growth is forecasted at 2.0% for 2026 and 2.2% for 2027, while Russia's growth is expected to be 1.3% in 2026 and 1.5% in 2027.

Trade normalization and monetary policy impacts are anticipated to play significant roles in shaping these economic forecasts.

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 increase by 0.15 mb/d, while the non-OECD is forecast to grow by about 1.2 mb/d. In 2027, global oil demand is projected to grow by approximately 1.3 mb/d, y-o-y, with the OECD growing by 0.1 mb/d and the non-OECD increasing by about 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 2026, driven primarily by Brazil, Canada, the US, and Argentina. This growth is expected to continue into 2027. Natural gas liquids (NGLs) and non-conventional liquids from DoC countries are forecast to grow by 0.1 mb/d, y-o-y, reaching an average of about 8.8 mb/d in 2026, with similar growth projected for 2027. In January, crude oil production by DoC countries decreased by 439 tb/d, m-o-m, to average about 42.45 mb/d.

Product Markets & Refining Operations

In January, refining margins declined across all reported trading hubs due to stronger feedstock prices and seasonal demand pressures. In the US Gulf Coast, losses were noted primarily in the bottom section of the barrel, while in Rotterdam, all key product margins declined, particularly gasoline. Singapore experienced a similar decline driven by elevated gasoline and jet/kerosene supplies.

Tanker Market & Freight Dynamics

Dirty tanker spot freight rates had a strong start in January, supported by weather disruptions and geopolitical uncertainties. VLCC spot freight rates saw significant increases, particularly on the Middle East-to-East route, which reached the highest level for the month in at least a decade, up by 64%, y-o-y. Suezmax rates also rose amid disruptions, while Aframax rates experienced strong performance, reaching a 10-year high for the month.

In the clean tanker market, spot freight rates improved, particularly in the East of Suez, with rates on the Middle East-to-East route up by 17%, m-o-m.

Crude & Refined Products Trade Flows

In January, US crude imports averaged 6.3 mb/d, consistent with the five-year average, while exports rose by almost 0.2 mb/d, m-o-m, to 4.2 mb/d. In OECD Europe, crude imports declined due to lower flows from Kazakhstan, while product exports increased. Japan's crude imports surged to nearly 3 mb/d, the highest since March 2020. China's crude imports reached a record high of 13.2 mb/d in December, while India's crude imports remained elevated at 5.1 mb/d.

Commercial Stock Movements

Preliminary December data indicate that OECD commercial oil inventories rose by 6.5 mb, m-o-m, reaching 2,845 mb. This level is 89.9 mb higher, y-o-y, and 44.1 mb above the five-year average, but 81.0 mb below the 2015–2019 average. Crude stocks fell by 2.1 mb, while product stocks increased by 8.6 mb, m-o-m. OECD crude oil commercial stocks stood at 1,363 mb, while total product stocks reached 1,481 mb.

Supply-Demand Balance & Market Outlook

The demand for DoC crude in 2026 remains at 43.0 mb/d, which is about 0.6 mb/d higher than that of 2025. The demand for DoC crude in 2027 is also unchanged at 43.6 mb/d.

The analysis reveals a significant supply-demand gap, indicating that the DoC requirement will need to be met to balance the market effectively. The strategic outlook for production decisions will be critical in addressing this gap.