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 heading up over $104 as escalation looks very likely.
ER
Crude Oil Radar
2026-05-19 23:54
Table of Contents
Brian's Thoughts
Today's Update
Crude oil prices are currently in a tight spot, heavily influenced by the geopolitical tension surrounding the Strait of Hormuz. With a significant supply drop of about 9 mmbpd from the Middle East in April, traders are cautiously pricing WTI around $100 and Brent over $109. Recent headlines suggest a potential resumption of flow in June, but the IEA warns of ongoing shortages until October. Keep an eye on the support level at $102.96, as market sentiment remains tethered to the evolving situation in Iran.
Market Summary
Technical Outlook
Moderately Bullish
Score:
3/5
Short: BUY
|
Medium: BUY |
Long: BUY
International Prices
Brent:
$112.1
$2.84
WTI:
$108.66
$3.24
Spread:
$3.44
(Brent premium of $3.44)
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:
$103.82
Signal:
Moderately Bullish
Moving Averages (9/20)
BULLISH
MA(9): $101.17
MA(20): $100.39
Current Price is 103.82, 9 day MA 101.17, 20 day MA 100.39
MACD (12, 26, 9)
BULLISH
MACD: 2.4342
Signal: 2.0032
Days since crossover: 3
MACD crossed the line 3 days ago and is in a bullish setup
RSI (14)
NEUTRAL
Value: 55.08
Category: NEUTRAL
RSI is 55.08 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 12,031
Avg (20d): 258,438
Ratio: 0.05
Volume is lower versus 20 day average
Stochastic (14, 3)
BEARISH CROSS
%K: 68.07
%D: 77.71
Stochastic %K: 68.07, %D: 77.71. Signal: bearish cross
ADX (14)
NO TREND
ADX: 16.46
+DI: 24.59
-DI: 16.99
ADX: 16.46 (+DI: 24.59, -DI: 16.99). Trend: no trend
Williams %R (14)
NEUTRAL
Value: -31.93
Williams %R: -31.93 (neutral zone)
Bollinger Bands (20, 2)
ABOVE MIDDLE
Upper: 109.7
Middle: 100.39
Lower: 91.08
Price vs BBands (20, 2): above middle. Upper: 109.7, Middle: 100.39, Lower: 91.08
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 $112.1, change $+2.84. WTI crude (JUN 26) settled at $108.66, change $+3.24. The Brent-WTI spread is currently $3.44 (Brent premium of $3.44). The Brent-WTI spread reflects differences in global vs. U.S. supply/demand dynamics, geopolitics, and transportation costs.
Brent Crude
$112.1
2.84
(JUL 26)
WTI Crude
$108.66
3.24
(JUN 26)
Brent-WTI Spread
$3.44
Brent premium of $3.44
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, to average $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 stable 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 are steady at 1.2% for both years. Japan's growth is projected at 0.9% for the same period, while China is expected to grow at 4.5%. India shows a strong growth outlook of 6.6% for 2026 and 6.5% for 2027. Brazil's growth is forecasted at 2.0% for 2026 and 2.2% for 2027, while Russia's economic growth is expected to be 1.3% in 2026 and 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 the previous assessment. The OECD is expected to increase by 0.15 mb/d, while non-OECD demand is projected to grow by about 1.2 mb/d. For 2027, global oil demand is forecast to grow by approximately 1.3 mb/d, with the OECD growing by 0.1 mb/d and 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 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, y-o-y, in 2026, averaging about 8.8 mb/d, 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 attributed to increased availability of heavy crude supplies. In Rotterdam, all key product margins fell, with gasoline leading the decline. Singapore also experienced a decline driven by elevated gasoline and jet/kerosene supplies.
Tanker Market & Freight Dynamics
Dirty tanker spot freight rates started the year strongly, supported by weather disruptions and geopolitical uncertainties. VLCC spot freight rates reached their highest level for January in at least a decade, up by 64% y-o-y. Suezmax rates rose due to weather disruptions, while Aframax rates also performed strongly, reaching a 10-year high for the month. In the clean tanker market, rates showed a strong performance, particularly on the Middle East-to-East route, which was 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 crude exports rose by almost 0.2 mb/d, m-o-m, to average 4.2 mb/d. In Japan, crude imports surged to just under 3 mb/d, the highest since March 2020. China's crude imports reached a record high of 13.2 mb/d in December, although product imports declined by 3%. India's crude imports remained elevated at 5.1 mb/d, despite a slight m-o-m decline.
Commercial Stock Movements
Preliminary December 2025 data indicate that OECD commercial oil inventories rose by 6.5 mb, m-o-m, to stand at 2,845 mb. This level is 89.9 mb higher y-o-y and 44.1 mb above the five-year 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, which is 75.5 mb higher y-o-y.
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 in 2025. For 2027, the demand remains at 43.6 mb/d, also reflecting an increase of 0.6 mb/d from the previous year. 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, with the requirement for DoC crude in 2026 at 43.0 mb/d and projected demand at 106.5 mb/d. This gap will necessitate strategic 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:
2026-05-12
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:
60
Last Updated:
2026-05-19 23:53:10
Commodity Sentiment
CRUDE_OIL
0.7
Top News Topics
Supply (3 articles)
Geopolitical (2 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
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
99.3
Daily:
0.33 (0.34%)
Weekly:
0.82 (0.84%)
US_10Y
4.67
Daily:
0.04 (0.95%)
Weekly:
0.19 (4.15%)
SP500
7353.61
Daily:
-49.44 (-0.67%)
Weekly:
-90.64 (-1.22%)
VIX
18.06
Daily:
0.24 (1.35%)
Weekly:
0.19 (1.06%)
GOLD
4463.5
Daily:
-89.0 (-1.95%)
Weekly:
-234.2 (-4.99%)
COPPER
6.18
Daily:
-0.1 (-1.55%)
Weekly:
-0.46 (-6.94%)
Fibonacci Analysis
Current Price:
$103.82
Closest Support:
$98.13
5.48% below current price
Closest Resistance:
$107.52
3.56% 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:
$107.77
Forecast Generated:
2026-05-19 23:53:15
Next Trading Day:
DOWN 0.09%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2026-05-20 | $107.67 | $99.56 | $115.77 |
| 2026-05-21 | $107.86 | $99.76 | $115.97 |
| 2026-05-22 | $108.16 | $100.06 | $116.27 |
| 2026-05-23 | $108.4 | $100.3 | $116.51 |
| 2026-05-24 | $108.3 | $100.19 | $116.41 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price decrease of ~0.09% for the next trading day (2026-05-20), reaching $107.67.
- The 5-day forecast suggests relatively stable prices between 2026-05-20 and 2026-05-24.
- The average confidence interval width is ~15.0% of the predicted price, indicating model uncertainty.
- SIGNAL: Weak bearish signal, high uncertainty.
AI Analysis
For Energy Traders:
The bullish sentiment in the market is supported by recent price increases in both the $62.31/b OPEC Reference Basket and the $64.73/b ICE Brent contract. The Brent-WTI spread of $4.47/b indicates a strengthening in Brent's price relative to WTI, reflecting global supply-demand dynamics.
With managed money positions showing a net long of 72,801 contracts, traders should be aware of potential volatility and consider Fibonacci retracement levels for support at $60.00/b and resistance at $65.00/b. Opportunities may arise from short-term fluctuations driven by geopolitical events and supply disruptions.
For Producers (Oil & Gas Companies):
The balance of supply and demand remains stable, with demand for DoC crude projected at 43.0 mb/d in 2026. This stability suggests producers can plan production confidently, but they should also consider hedging strategies as the market sentiment is increasingly optimistic.
Inventory levels, particularly the recent increase in OECD commercial oil inventories by 6.5 mb, may impact pricing strategies. Producers should evaluate their hedging techniques to mitigate risks from potential price fluctuations.
For Consumers (Industrial/Refineries/Transportation):
Consumers should brace for potential input cost fluctuations as both WTI and Brent prices show upward trends, with Brent currently at $64.73/b. The supply reliability risks from geopolitical tensions and fluctuating inventories, particularly from the OECD's inventory levels, necessitate proactive procurement strategies.
With crude imports and product exports showing mixed signals, it may be prudent for consumers to consider hedging against rising costs, especially in light of the overall market sentiment and increased demand forecasts.
For Commodity Professionals (Analysts, Consultants):
The Crude Oil market is exhibiting a bullish outlook driven by strong fundamentals, including steady demand growth and tightening supply from OPEC. The balance of supply and demand remains favorable, with global oil demand growth expected at 1.4 mb/d in 2026.
The geopolitical factors and recent price movements suggest potential volatility ahead. Analysts should monitor CFTC positioning closely, as managed money's net long positions may indicate further price increases or market corrections. The overall sentiment is strengthening, suggesting a positive outlook for the near term.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Please consult with a qualified financial advisor before making any investment decisions.