Crude Oil Radar

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 saw a rise of $2.39/b, m-o-m, averaging $60.26/b. The GME Oman front-month contract also rose by $0.83/b, m-o-m, to average $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 of all major crude benchmarks strengthened, with the front end of the curves for both ICE Brent and NYMEX WTI moving into stronger backwardation. This 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.

The global economic growth forecasts remain unchanged from last month’s assessment at 3.1% for 2026 and 3.2% for 2027. Specific growth outlooks include:

• US: Revised up slightly to 2.2% for 2026, remains at 2% for 2027
• Eurozone: 1.2% for both 2026 and 2027
• Japan: 0.9% for both 2026 and 2027
• China: 4.5% for both 2026 and 2027
• India: 6.6% for 2026 and 6.5% for 2027
• Brazil: 2.0% for 2026 and 2.2% for 2027
• Russia: 1.3% for 2026 and 1.5% for 2027

Trade normalization and monetary policy impacts continue to shape the economic landscape.

The global oil demand growth forecast for 2026 remains at 1.4 mb/d, y-o-y, unchanged from last month’s assessment. The breakdown is as follows:

• OECD: Forecast to increase by 0.15 mb/d
• Non-OECD: Forecast to grow by about 1.2 mb/d

In 2027, global oil demand is forecast to grow by about 1.3 mb/d, y-o-y, with the OECD expected to grow by 0.1 mb/d and the non-OECD by about 1.2 mb/d.

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. The outlook for NGLs and non-conventional liquids from DoC countries is as follows:

• 2026: Growth of 0.1 mb/d to average about 8.8 mb/d
• 2027: Similar growth of 0.1 mb/d to average about 8.9 mb/d

In January, crude oil production by DoC countries decreased by 439 tb/d, m-o-m, to average about 42.45 mb/d.

In January, refining margins declined across all reported trading hubs due to stronger feedstock prices and seasonal demand pressures. Key observations include:

• US Gulf Coast: Losses stemmed from heavy crude supplies affecting fuel oil and gasoil crack spreads.
• Rotterdam: All key product margins declined, with gasoline leading the decrease.
• Singapore: Decline driven by elevated gasoline and jet/kerosene supplies.

Dirty tanker spot freight rates had a strong start in January, supported by various factors:

• VLCC spot freight rates reached the highest level for the month in at least a decade, up by 64%, y-o-y.
• Suezmax rates rose by 12%, m-o-m, driven by weather disruptions and demand from European refiners.
• Aframax spot freight rates also performed well, with cross-Med rates rising by 10%, m-o-m.
• Clean tanker market rates showed strength, particularly on the Middle East-to-East route, up by 17%, m-o-m.

US crude imports averaged 6.3 mb/d in January, consistent with the five-year average. Key trade trends include:

• US crude exports rose to 4.2 mb/d, with increased flows to Europe and Africa.
• Japan's crude imports surged to just under 3 mb/d in December, the highest since March 2020.
• China's crude imports reached a record high of 13.2 mb/d in December.
• India's crude imports remained elevated at 5.1 mb/d, despite a slight decline.

Preliminary December 2025 data indicate that OECD commercial oil inventories rose by 6.5 mb, m-o-m, to stand at 2,845 mb. Key points include:

• 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, 75.5 mb higher, y-o-y.
• Days of forward cover rose by 0.7 days, m-o-m, to 62.8 days.

The demand for DoC crude in 2026 remains at 43.0 mb/d, which is about 0.6 mb/d higher than in 2025. The forecast for 2027 is unchanged at 43.6 mb/d, also reflecting a 0.6 mb/d increase. The supply-demand balance is summarized as follows:

This analysis indicates a supply-demand gap that necessitates strategic production decisions moving forward. The gap between world demand and non-DoC supply highlights the importance of DoC production to meet global oil needs.