Everything and I mean EVERYTHING is about the Strait of Hormuz - almost no one knew about the constraint point before the US attacked Iran - but now every news outlet talks about it all the time. Supply out of the Middle East is down about 9 mmbpd in April (May’s numbers will lag). Physical barrels are priced higher $120-150 while Peace would lead to $80. So traders have it priced “about right” with WTI at $100 and Brent over $109. Everything is about headlines right now and the latest ones indicate that there is a consensus expectation that flow through the Strait of Hormuz will start up again in June….IEA indicated that even if flows resume - we will be short barrels through October. WTI and Brent headed up as signs for peace dwindle
ER
Crude Oil Radar
2026-05-18 23:54
Table of Contents
Brian's Thoughts
Today's Update
Crude oil markets are currently at a crossroads, heavily influenced by the Strait of Hormuz situation. With supply from the Middle East down by 9 mmbpd, WTI is hovering around $100 and Brent over $109, reflecting concerns over ongoing geopolitical tensions. Despite recent easing due to Trump’s comments on Iran, a consensus suggests supply disruptions will continue until October. Traders are keenly watching for potential peace signs, which could shift prices dramatically—possibly leading WTI to $80 if stability returns.
Market Summary
Technical Outlook
Moderately Bullish
Score:
3/5
Short: BUY
|
Medium: BUY |
Long: BUY
International Prices
Brent:
$109.26
$3.54
WTI:
$105.42
$4.25
Spread:
$3.84
(Brent premium of $3.84)
Key Fundamentals
Crude Stocks:
N/A
(0)
Net Imports:
N/A
(0)
News Sentiment
BULLISH
Spec Positioning
Net Position:
72,801
Weekly Change:
2,010
Technical Analysis
Overall Technical Score (-5 to +5):
3
(Moderately Bullish)
Current Price:
$102.72
Signal:
Moderately Bullish
Moving Averages (9/20)
BULLISH
MA(9): $99.54
MA(20): $99.51
Current Price is 102.72, 9 day MA 99.54, 20 day MA 99.51
MACD (12, 26, 9)
BULLISH
MACD: 1.971
Signal: 1.8007
Days since crossover: 2
MACD crossed the line 2 days ago and is in a bullish setup
RSI (14)
NEUTRAL
Value: 54.92
Category: NEUTRAL
RSI is 54.92 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 10,689
Avg (20d): 271,655
Ratio: 0.04
Volume is lower versus 20 day average
Stochastic (14, 3)
BEARISH CROSS
%K: 63.13
%D: 64.86
Stochastic %K: 63.13, %D: 64.86. Signal: bearish cross
ADX (14)
NO TREND
ADX: 15.78
+DI: 23.32
-DI: 18.78
ADX: 15.78 (+DI: 23.32, -DI: 18.78). Trend: no trend
Williams %R (14)
NEUTRAL
Value: -36.87
Williams %R: -36.87 (neutral zone)
Bollinger Bands (20, 2)
ABOVE MIDDLE
Upper: 108.58
Middle: 99.51
Lower: 90.44
Price vs BBands (20, 2): above middle. Upper: 108.58, Middle: 99.51, Lower: 90.44
Fundamental Analysis
| Category | Current | Last Week | Last Year | 3 Yr Avg |
|---|---|---|---|---|
| Crude Production (Thousand Barrels a Day) | 13710.0 | 13573.0 | 13367.0 | 12895.67 |
| Crude Imports (Thousand Barrels a Day) | 5901.0 | 5477.0 | 6056.0 | 6481.67 |
| Crude Exports (Thousand Barrels a Day) | 5492.0 | 4750.0 | 4006.0 | 3938.0 |
| Refinery Inputs (Thousand Barrels a Day) | 16399.0 | 16029.0 | 16071.0 | 16215.33 |
| Net Imports (Thousand Barrels a Day) | 409.0 | 727.0 | 2050.0 | 2543.67 |
| Commercial Crude Stocks (Thousand Barrels) | 452876.0 | 457182.0 | 438376.0 | 455491.33 |
| Crude & Products Total Stocks (Thousand Barrels) | 1620349.0 | 1634013.0 | 1612398.0 | 1610181.0 |
| Gasoline Stocks (Thousand Barrels) | 215711.0 | 219795.0 | 225728.0 | 223601.0 |
| Distillate Stocks (Thousand Barrels) | 102534.0 | 102344.0 | 106708.0 | 108717.0 |
International Price Analysis
International Price Summary
Brent crude (JUL 26) settled at $109.26, change $+3.54. WTI crude (JUN 26) settled at $105.42, change $+4.25. The Brent-WTI spread is currently $3.84 (Brent premium of $3.84). The Brent-WTI spread reflects differences in global vs. U.S. supply/demand dynamics, geopolitics, and transportation costs.
Brent Crude
$109.26
3.54
(JUL 26)
WTI Crude
$105.42
4.25
(JUN 26)
Brent-WTI Spread
$3.84
Brent premium of $3.84
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 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 an increase of $0.83/b, m-o-m, averaging $62.79/b. The Brent–WTI front-month spread rose 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 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 economic outlooks for key regions are as follows:
- US: Revised up slightly to 2.2% for 2026, remains at 2% for 2027
- Eurozone: Steady at 1.2% for both 2026 and 2027
- Japan: Consistent at 0.9% for both years
- China: Maintains a forecast of 4.5% for both years
- India: Forecasts at 6.6% for 2026 and 6.5% for 2027
- Brazil: Remains at 2.0% for 2026 and 2.2% for 2027
- Russia: Steady at 1.3% for 2026 and 1.5% for 2027
Trade normalization and monetary policy impacts are expected to influence these growth trajectories positively.
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 breakdown is as follows:
- OECD: Forecast to increase by 0.15 mb/d
- Non-OECD: Expected to grow by about 1.2 mb/d
For 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.
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. The outlook for NGLs and non-conventional liquids from DoC countries indicates a growth of 0.1 mb/d, y-o-y, in both years.
Recent trends show that 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. Key observations include:
- US Gulf Coast: Losses from the bottom section of the barrel due to increased heavy crude supply
- Rotterdam: All key product margins declined, with gasoline leading the drop
- Singapore: Decline driven by elevated gasoline and jet/kerosene supplies
Tanker Market & Freight Dynamics
The dirty tanker spot freight rates had a strong start in January, supported by various factors including weather disruptions and geopolitical uncertainties. Key developments include:
- VLCC rates surged, with Middle East-to-East route rates reaching a decade high, up by 64%, y-o-y
- Suezmax rates increased by 12%, m-o-m, due to weather disruptions
- Aframax rates also performed strongly, with cross-Med rates up by 10%, m-o-m
- Clean tanker market rates rose, particularly in the East of Suez, with a 17% m-o-m increase
Crude & Refined Products Trade Flows
US crude imports averaged 6.3 mb/d in January, aligning with the five-year average. Notable trends include:
- US crude exports rose by almost 0.2 mb/d, m-o-m, to 4.2 mb/d
- OECD Europe saw a decline in crude imports, driven by lower flows from Kazakhstan
- China’s crude imports surged to a record high of 13.2 mb/d in December
- India’s crude imports remained elevated at 5.1 mb/d
Commercial Stock Movements
Preliminary December 2025 data indicate that OECD commercial oil inventories rose by 6.5 mb, m-o-m, to 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 increased by 0.7 days, m-o-m, to 62.8 days
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. For 2027, the demand is unchanged at 43.6 mb/d.
The following table summarizes the supply-demand balance analysis:
| 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, highlighting the need for strategic production decisions moving forward.
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:
2026-05-12
Managed Money
72,801
Change: +2,010
3.5% of OI
Producer/Merchant
357,407
Change: +19,906
17.2% of OI
Swap Dealers
-553,541
Change: -9,890
-26.6% of OI
Open Interest
2,081,927
Change: 14,100
Summary Analysis:
CFTC Commitment of Traders Report (Disaggregated) as of 2026-05-12
Crude Oil Positioning (WTI-PHYSICAL - NYMEX):
Open Interest: 2,081,927 contracts (+14,100)
Managed Money Net Position: 72,801 contracts (3.5% of OI)
Weekly Change in Managed Money Net: +2,010 contracts
Producer/Merchant Net Position: 357,407 contracts
Swap Dealer Net Position: -553,541 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:
0.7
Confidence:
1.0
Articles Analyzed:
51
Last Updated:
2026-05-18 23:53:37
Commodity Sentiment
CRUDE_OIL
0.7
Top News Topics
Supply (2 articles)
Geopolitical (3 articles)
- Sterling Vulnerable to Fall If Geopolitical Concerns Intensify — Market Talk Dow Jones Newswires
- U.S. Treasury Yields Rise With No End to Middle East Conflict in Sight — Market Talk Dow Jones Newswires
- Middle East Breakthrough Still Seen as Elusive — 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
99.08
Daily:
-0.19 (-0.19%)
Weekly:
0.79 (0.8%)
US_10Y
4.62
Daily:
0.03 (0.61%)
Weekly:
0.16 (3.59%)
SP500
7403.05
Daily:
-5.45 (-0.07%)
Weekly:
2.09 (0.03%)
VIX
17.82
Daily:
-0.61 (-3.31%)
Weekly:
-0.17 (-0.94%)
GOLD
4552.7
Daily:
-3.1 (-0.07%)
Weekly:
-124.9 (-2.67%)
COPPER
6.25
Daily:
0.0 (0.04%)
Weekly:
-0.23 (-3.56%)
Fibonacci Analysis
Current Price:
$102.72
Closest Support:
$98.13
4.47% below current price
Closest Resistance:
$107.52
4.67% above current price
Fibonacci Retracement Levels
0.0
$63.6
0.236
$76.79
0.382
$84.95
0.5
$91.54
0.618
$98.13
Support
0.786
$107.52
Resistance
1.0
$119.48
Fibonacci Extension Levels
1.272
$134.68
1.618
$154.01
2.0
$175.36
2.618
$209.89
ML Price Prediction
Current Price:
$108.66
Forecast Generated:
2026-05-18 23:53:40
Next Trading Day:
DOWN 0.12%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2026-05-19 | $108.53 | $97.86 | $119.2 |
| 2026-05-20 | $108.39 | $97.72 | $119.05 |
| 2026-05-21 | $108.53 | $97.86 | $119.2 |
| 2026-05-22 | $108.87 | $98.21 | $119.54 |
| 2026-05-23 | $109.11 | $98.44 | $119.78 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price decrease of ~0.12% for the next trading day (2026-05-19), reaching $108.53.
- The 5-day forecast suggests relatively stable prices between 2026-05-19 and 2026-05-23.
- The average confidence interval width is ~19.6% of the predicted price, indicating model uncertainty.
- SIGNAL: Weak bearish signal, high uncertainty.
AI Analysis
For Energy Traders:
The recent bullish sentiment in the crude oil market indicates potential upward price movements. The Brent and WTI prices have shown significant increases, with Brent rising to an average of $64.73 and WTI to $60.26. The Brent-WTI spread at $4.47 suggests a strong demand for Brent, driven by global supply dynamics and geopolitical factors.
Traders should be cautious of volatility driven by geopolitical tensions, particularly in the Middle East, which could impact price stability. The increase in managed money net positions indicates that speculators are becoming more optimistic, which could lead to further price increases if the trend continues. However, watch for any signs of resistance levels forming around the recent highs.
For Producers (Oil & Gas Companies):
With the bullish market sentiment and rising prices, producers should consider adjusting their production planning to maximize revenue. The forecasted increase in global oil demand of 1.4 mb/d in 2026 supports this strategy.
However, the recent increase in inventory levels could pose a risk. Producers need to monitor crude and product stocks, which rose by 6.5 mb in December, to ensure that production levels align with market demand. Hedging strategies may be beneficial to mitigate potential price declines if market conditions shift.
For Consumers (Industrial/Refineries/Transportation):
Consumers should brace for potential input cost fluctuations as crude prices have been on the rise, with Brent averaging $64.73 and WTI at $60.26. The market sentiment suggests that prices may continue to rise, affecting procurement strategies.
Additionally, geopolitical uncertainties could impact supply reliability, particularly with the ongoing tensions in the Middle East. It is advisable for consumers to consider hedging strategies to manage costs and ensure stable supply amid these uncertainties.
For Commodity Professionals (Analysts, Consultants):
The crude oil market is currently influenced by several bullish factors, including rising prices, increased demand forecasts, and a bullish sentiment among speculators. The Brent-WTI spread indicates a divergence in supply-demand dynamics, reflecting geopolitical and logistical challenges.
Key driving factors include the balance of supply and demand, with global oil demand expected to grow significantly while non-DoC production remains stable. Analysts should also consider the implications of rising inventories and geopolitical risks that could affect market stability. A close watch on technical indicators and positioning data will be crucial for forecasting potential market shifts.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice or specific buy/sell recommendations. Always conduct your own research and consult with a financial advisor before making investment decisions.