Crude Oil is a quagmire - as we take in continued peace talks on one side with increased attacks from both the US and Iran (largest escalation since the MOU was signed). With those attacks - one would expect that WTI & Brent would travel north - but we aren't witnessing this - we are seeing a drop below 68.48 and trying to get to the next support line of 66.84. Meanwhile physical cargoes are trading much higher - approximately $10 to $40 higher based on what we have heard. This points to the physical market dislocated from the financial market - the key - which one will win. Physical will always drive the bus longterm - however we now have to factor in whether or not there will be an economic slowdown which would drag physical prices down as demand destruction escalates. But the key reason why I think that physical will win out is math: there is roughly 9 mmbpd of supply down in the middle east and currently 5 mmbpd of demand destruction. If FULL PEACE occurred today and the strait of hormuz was fully operational TODAY (there has only been 5 ships flowing through the strait in the last 24 hours versus 140 ships pre-war), then we would have 30-45 days of the existing ships unloading before any more crude could be moved...then another 90 days to bring production back online...plus once that hits the market - even with demand destruction - we'll see 2-4 mmbpd of demand for SPR refills (in the US, Europe, and Asia). The math supports higher prices. Key levels are 63.80, 66.84, 66.48, 71.41, 72.95 and we are currently trading 67.17
ER
Crude Oil Radar
2026-07-02 23:54
Table of Contents
Brian's Thoughts
Today's Update
Crude Oil is currently in a perplexing scenario, with peace talks countered by escalations between the US and Iran, yet prices remain stubbornly below $68.48, eyeing support at $66.84. Interestingly, physical cargoes are trading significantly higher, indicating a disconnect from financial markets. With a supply reduction of 9 mmbpd in the Middle East and 5 mmbpd in demand destruction, the math suggests potential price increases. Keep an eye on critical levels of 63.80, 66.84, and 71.41 as market dynamics unfold.
Market Summary
Technical Outlook
Neutral
Score:
-1/5
Short: SELL
|
Medium: SELL |
Long: SELL
International Prices
Brent:
$72.95
$0.03
WTI:
$68.58
$0.92
Spread:
$4.37
(Brent premium of $4.37)
Key Fundamentals
Crude Stocks:
N/A
(0)
Net Imports:
N/A
(0)
News Sentiment
NEUTRAL
Spec Positioning
Net Position:
82,872
Weekly Change:
13,356
Technical Analysis
Overall Technical Score (-5 to +5):
-1
(Neutral)
Current Price:
$69.03
Signal:
Neutral
Moving Averages (9/20)
BEARISH
MA(9): $70.82
MA(20): $78.66
Current Price is 69.03, 9 day MA 70.82, 20 day MA 78.66
MACD (12, 26, 9)
BEARISH
MACD: -6.5123
Signal: -6.0017
Days since crossover: 29
MACD crossed the line 29 days ago and is in a bearish setup
RSI (14)
OVERSOLD
Value: 29.5
Category: OVERSOLD
RSI is 29.5 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 6,307
Avg (20d): 216,558
Ratio: 0.03
Volume is lower versus 20 day average
Stochastic (14, 3)
OVERSOLD
%K: 5.75
%D: 4.02
Stochastic %K: 5.75, %D: 4.02. Signal: oversold
ADX (14)
STRONG DOWNTREND
ADX: 28.67
+DI: 12.27
-DI: 29.69
ADX: 28.67 (+DI: 12.27, -DI: 29.69). Trend: strong downtrend
Williams %R (14)
OVERSOLD
Value: -94.25
Williams %R: -94.25 (oversold)
Bollinger Bands (20, 2)
BELOW MIDDLE
Upper: 95.73
Middle: 78.66
Lower: 61.6
Price vs BBands (20, 2): below middle. Upper: 95.73, Middle: 78.66, Lower: 61.6
Fundamental Analysis
| Category | Current | Last Week | Last Year | 3 Yr Avg |
|---|---|---|---|---|
| Crude Production (Thousand Barrels a Day) | 13810.0 | 13819.0 | 13435.0 | 13011.0 |
| Crude Imports (Thousand Barrels a Day) | 5279.0 | 5570.0 | 5944.0 | 6834.67 |
| Crude Exports (Thousand Barrels a Day) | 4008.0 | 4669.0 | 4270.0 | 3535.67 |
| Refinery Inputs (Thousand Barrels a Day) | 17196.0 | 17111.0 | 16987.0 | 16642.33 |
| Net Imports (Thousand Barrels a Day) | 1271.0 | 901.0 | 1674.0 | 3299.0 |
| Commercial Crude Stocks (Thousand Barrels) | 408359.0 | 412134.0 | 415106.0 | 439890.67 |
| Crude & Products Total Stocks (Thousand Barrels) | 1527225.0 | 1533511.0 | 1633245.0 | 1635609.0 |
| Gasoline Stocks (Thousand Barrels) | 213966.0 | 216299.0 | 227938.0 | 227751.33 |
| Distillate Stocks (Thousand Barrels) | 108599.0 | 106116.0 | 105332.0 | 112238.67 |
International Price Analysis
International Price Summary
Brent crude (AUG 26) settled at $72.95, change $+0.03. WTI crude (AUG 26) settled at $68.58, change $-0.92. The Brent-WTI spread is currently $4.37 (Brent premium of $4.37). The Brent-WTI spread reflects differences in global vs. U.S. supply/demand dynamics, geopolitics, and transportation costs.
Brent Crude
$72.95
0.03
(AUG 26)
WTI Crude
$68.58
0.92
(AUG 26)
Brent-WTI Spread
$4.37
Brent premium of $4.37
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 increased by $0.71/b, m-o-m, to average $4.47/b.
The forward curves for all major crude benchmarks strengthened, with 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.
World Economy & Macroeconomic Backdrop
The global economic growth forecasts remain unchanged at 3.1% for 2026 and 3.2% for 2027. Key forecasts include:
- US: 2.2% growth for 2026, 2.0% for 2027
- Eurozone: 1.2% growth for both 2026 and 2027
- Japan: 0.9% growth for both years
- China: 4.5% growth for both years
- India: 6.6% growth for 2026, 6.5% for 2027
- Brazil: 2.0% growth for 2026, 2.2% for 2027
- Russia: 1.3% growth for 2026, 1.5% for 2027
Trade normalization and monetary policy impacts are expected to play a significant role in shaping these forecasts.
World Oil Demand Trends
The global oil demand growth forecast for 2026 remains at 1.4 mb/d, y-o-y, with the OECD expected to increase by 0.15 mb/d and the non-OECD forecasted to grow by about 1.2 mb/d. For 2027, global oil demand is projected to grow by about 1.3 mb/d, y-o-y, with the OECD growing by 0.1 mb/d and the non-OECD by approximately 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, reaching an average of about 8.8 mb/d in 2026 and 8.9 mb/d in 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. 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 decline.
- Singapore: Declines 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 various factors including weather disruptions and geopolitical uncertainties. Highlights include:
- VLCC rates surged, with Middle East-to-East routes seeing a 64% increase y-o-y.
- Suezmax rates rose by 12%, m-o-m, driven by weather disruptions.
- Aframax rates also performed strongly, reaching a 10-year high for the month.
- Clean tanker market rates increased, particularly in the East of Suez region.
Crude & Refined Products Trade Flows
US crude imports averaged 6.3 mb/d in January, aligning with the five-year average. Key trends include:
- US crude exports rose to 4.2 mb/d, with higher flows to Europe and Africa.
- 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.
- India's crude imports remained elevated at 5.1 mb/d.
Commercial Stock Movements
Preliminary December 2025 data indicates 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.
- 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 in 2025. The 2027 demand is projected at 43.6 mb/d, also an increase of 0.6 mb/d. 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 |
This analysis indicates a supply-demand gap that necessitates 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 but Weakening
Positioning:
Normal Range
Report Date:
2026-06-23
Managed Money
82,872
Change: -13,356
4.3% of OI
Producer/Merchant
378,876
Change: +160
19.8% of OI
Swap Dealers
-531,482
Change: +12,573
-27.8% of OI
Open Interest
1,911,877
Change: -95,832
Summary Analysis:
CFTC Commitment of Traders Report (Disaggregated) as of 2026-06-23
Crude Oil Positioning (WTI-PHYSICAL - NYMEX):
Open Interest: 1,911,877 contracts (-95,832)
Managed Money Net Position: 82,872 contracts (4.3% of OI)
Weekly Change in Managed Money Net: -13,356 contracts
Producer/Merchant Net Position: 378,876 contracts
Swap Dealer Net Position: -531,482 contracts
Market Sentiment (based on Managed Money): Bullish but Weakening
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
NEUTRAL
Average Polarity:
0.0
Confidence:
1.0
Articles Analyzed:
45
Last Updated:
2026-07-02 23:52:57
Commodity Sentiment
CRUDE_OIL
0.0
Top News Topics
Supply (2 articles)
Infrastructure (2 articles)
Economic Analysis
Economic Sentiment Summary
POSITIVE - Economic indicators generally supportive
Dollar Impact:
Weaker USD may support commodity prices
Industrial Demand:
Strong industrial demand signals
Interest Rate Impact:
Stable/lower rates may support demand
Risk Sentiment:
Low market volatility/risk appetite
Economic Indicators
USD_INDEX
100.81
Daily:
-0.58 (-0.57%)
Weekly:
-0.55 (-0.54%)
US_10Y
4.48
Daily:
0.11 (2.58%)
Weekly:
-0.01 (-0.18%)
SP500
7483.24
Daily:
0.01 (0.0%)
Weekly:
129.22 (1.76%)
VIX
16.15
Daily:
-0.44 (-2.65%)
Weekly:
-2.26 (-12.28%)
GOLD
4193.4
Daily:
125.1 (3.07%)
Weekly:
114.7 (2.81%)
COPPER
6.25
Daily:
0.13 (2.08%)
Weekly:
0.11 (1.78%)
Fibonacci Analysis
Current Price:
$69.03
Closest Support:
$67.92
1.61% below current price
Closest Resistance:
$78.07
13.1% above current price
Fibonacci Retracement Levels
0.0
$67.92
Support
0.236
$78.07
Resistance
0.382
$84.35
0.5
$89.42
0.618
$94.5
0.786
$101.73
1.0
$110.93
Fibonacci Extension Levels
1.272
$122.63
1.618
$137.51
2.0
$153.94
2.618
$180.52
ML Price Prediction
Current Price:
$68.69
Forecast Generated:
2026-07-02 23:52:59
Next Trading Day:
DOWN 0.38%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2026-07-03 | $68.43 | $63.86 | $72.99 |
| 2026-07-04 | $68.58 | $64.02 | $73.14 |
| 2026-07-05 | $68.45 | $63.89 | $73.02 |
| 2026-07-06 | $68.34 | $63.78 | $72.91 |
| 2026-07-07 | $68.37 | $63.81 | $72.93 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price decrease of ~0.38% for the next trading day (2026-07-03), reaching $68.43.
- The 5-day forecast suggests relatively stable prices between 2026-07-03 and 2026-07-07.
- The average confidence interval width is ~13.3% of the predicted price, indicating model uncertainty.
- SIGNAL: Weak bearish signal, high uncertainty.
AI Analysis
For Energy Traders:
The Crude Oil market is showing signs of bullish sentiment as indicated by the increase in speculative positions. The Brent-WTI spread has widened to $4.47, suggesting potential opportunities for arbitrage between the two benchmarks.
Traders should be aware of volatility risks stemming from geopolitical tensions, particularly around the Strait of Hormuz, which has affected tanker flows. The support levels for WTI are around $60, while resistance is seen at $64.
The overall price movement indicates short-term opportunities as the market adjusts to evolving supply and demand dynamics, particularly with the bullish positioning of managed money traders.
For Producers (Oil & Gas Companies):
Producers should consider the current balance of supply and demand, with a forecasted demand for DoC crude at 43.0 mb/d in 2026. This stable demand outlook suggests a favorable environment for production planning.
The increase in hedging strategies is advisable given the current market sentiment and inventory levels. With OECD commercial oil inventories rising to 2,845 mb, understanding the implications for crude and product inventories will be crucial for operational decisions.
The bullish positioning from speculators may provide upward price pressure, which could enhance revenue but also necessitate careful management of production levels to avoid oversupply.
For Consumers (Industrial/Refineries/Transportation):
Consumers should brace for potential input cost fluctuations as WTI and Brent prices remain volatile, with current prices around WTI $60.26 and Brent $64.73.
The geopolitical risks, particularly in the Strait of Hormuz, pose a supply reliability risk that could impact procurement strategies. With crude imports into the U.S. averaging 6.3 mb/d, maintaining flexibility in sourcing will be essential.
Given the decline in product exports from the U.S. and the fluctuating demand for refined products, consumers might consider adjusting their hedging strategies to mitigate potential cost increases.
For Commodity Professionals (Analysts, Consultants):
The Crude Oil market is currently characterized by a bullish sentiment driven by increased speculative positions and a stable demand forecast. The balance of supply and demand indicates a steady growth trajectory, particularly in non-OECD markets.
Key driving factors include geopolitical tensions affecting tanker flows and robust physical market fundamentals supporting price increases. Analysts should monitor the risks associated with geopolitical instability and how they may impact the overall market outlook.
The strength of the Brent-WTI spread and the evolving positioning of managed money traders are critical elements to watch for potential shifts in market dynamics.
Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Always conduct your own research and consult with a financial advisor before making investment decisions.