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 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 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% in 2026 and 3.2% in 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 economic growth forecasts remain at 1.2% for both years. Japan's growth forecasts are steady at 0.9%, while China's remains at 4.5%. India's economic growth is forecasted at 6.6% for 2026 and 6.5% for 2027. Brazil's growth forecasts are stable at 2.0% for 2026 and 2.2% for 2027, while Russia's economic growth forecasts are at 1.3% for 2026 and 1.5% for 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 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 projected to grow by 0.1 mb/d in both 2026 and 2027. In January, crude oil production by DoC countries decreased by 439 tb/d, m-o-m, averaging 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, 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 robust start in January, supported by weather disruptions and geopolitical uncertainties. 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 amid weather disruptions, while Aframax spot freight rates also performed strongly, reaching a 10-year high for the month. In the clean tanker market, rates were led by East of Suez, with significant increases noted.

Crude & Refined Products Trade Flows

US crude imports averaged 6.3 mb/d in January, consistent with the five-year average. US crude exports rose by almost 0.2 mb/d, m-o-m, to average 4.2 mb/d. In Japan, crude imports surged, averaging 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. India's crude imports remained elevated at 5.1 mb/d, despite a slight decline.

Commercial Stock Movements

Preliminary December 2025 data show that OECD commercial oil inventories rose by 6.5 mb, m-o-m, to stand at 2,845 mb. Crude stocks fell by 2.1 mb, while product stocks increased by 8.6 mb. OECD crude oil commercial stocks stood at 1,363 mb, which is 75.5 mb higher, y-o-y. In terms of days of forward cover, OECD commercial stocks rose by 0.7 days, m-o-m, to stand at 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. The demand for DoC crude in 2027 also remains at 43.6 mb/d, reflecting a similar increase. The supply-demand gap analysis indicates that world demand is projected at 106.5 mb/d for 2026, while non-DoC supply is forecast at 63.5 mb/d, resulting in a DoC requirement gap of 42.5 mb/d.

The implications of this analysis indicate a tightening market, necessitating strategic production decisions to address the supply-demand gap effectively.