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
2026-07-04 23:53
Table of Contents
Brian's Thoughts
Today's Update
Crude Oil remains in a state of flux, caught between escalating tensions in the Middle East and subdued pricing, currently hovering around $67.17. Despite physical cargoes trading significantly higher, the financial market is disconnected, with support levels to watch at 66.84 and 66.48. With 9 mmbpd of Middle Eastern supply and 5 mmbpd of demand destruction, the math suggests potential upside if peace prevails. However, economic slowdowns loom, adding uncertainty.
Watch those support levels closely!
Market Summary
Technical Outlook
Neutral
Score:
-1/5
Short: SELL
|
Medium: SELL |
Long: SELL
International Prices
Brent:
$71.8
$0.23
WTI:
$68.69
$0.11
Spread:
$3.11
(Brent premium of $3.11)
Key Fundamentals
Crude Stocks:
N/A
(0)
Net Imports:
N/A
(0)
News Sentiment
BEARISH
Spec Positioning
Net Position:
82,872
Weekly Change:
13,356
Technical Analysis
Overall Technical Score (-5 to +5):
-1
(Neutral)
Current Price:
$68.78
Signal:
Neutral
Moving Averages (9/20)
BEARISH
MA(9): $70.11
MA(20): $77.43
Current Price is 68.78, 9 day MA 70.11, 20 day MA 77.43
MACD (12, 26, 9)
BEARISH
MACD: -6.4072
Signal: -6.0872
Days since crossover: 30
MACD crossed the line 30 days ago and is in a bearish setup
RSI (14)
OVERSOLD
Value: 28.9
Category: OVERSOLD
RSI is 28.9 (note 70% is overbought and 30% is oversold)
Volume (vs 20d Avg)
LOWER
Current: 48,758
Avg (20d): 216,887
Ratio: 0.22
Volume is lower versus 20 day average
Stochastic (14, 3)
OVERSOLD
%K: 11.31
%D: 7.35
Stochastic %K: 11.31, %D: 7.35. Signal: oversold
ADX (14)
STRONG DOWNTREND
ADX: 29.67
+DI: 12.66
-DI: 30.09
ADX: 29.67 (+DI: 12.66, -DI: 30.09). Trend: strong downtrend
Williams %R (14)
OVERSOLD
Value: -88.69
Williams %R: -88.69 (oversold)
Bollinger Bands (20, 2)
BELOW MIDDLE
Upper: 93.7
Middle: 77.43
Lower: 61.16
Price vs BBands (20, 2): below middle. Upper: 93.7, Middle: 77.43, Lower: 61.16
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 (SEP 26) settled at $71.8, change $+0.23. WTI crude (AUG 26) settled at $68.69, change $+0.11. The Brent-WTI spread is currently $3.11 (Brent premium of $3.11). The Brent-WTI spread reflects differences in global vs. U.S. supply/demand dynamics, geopolitics, and transportation costs.
Brent Crude
$71.8
0.23
(SEP 26)
WTI Crude
$68.69
0.11
(AUG 26)
Brent-WTI Spread
$3.11
Brent premium of $3.11
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 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 is slightly revised up to 2.2% for 2026, 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 is projected at 4.5%. India continues to show strong growth at 6.6% for 2026 and 6.5% for 2027. Brazil's growth remains at 2.0% for 2026 and 2.2% for 2027, while Russia's 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 forecast to grow by about 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 mainly 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, y-o-y, in both years. 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 driven by increased availability of heavy crude supplies. In Rotterdam, all key product margins declined, with gasoline leading the drop. Singapore's decline was attributed to elevated gasoline and jet/kerosene supplies.
Tanker Market & Freight Dynamics
Dirty tanker spot freight rates had a strong start to the year, 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 rates also performed strongly, reaching a 10-year high. In the clean tanker market, spot freight rates showed strong performance, particularly on the Middle East-to-East route.
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 to 4.2 mb/d, driven by higher flows to Europe and Africa. 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, while India’s crude imports remained elevated at 5.1 mb/d.
Commercial Stock Movements
Preliminary December data show that OECD commercial oil inventories rose by 6.5 mb, m-o-m, to 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. Days of forward cover rose 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. The demand for DoC crude in 2027 is also unchanged at 43.6 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 |
The analysis indicates a supply-demand gap for DoC crude, necessitating strategic production decisions 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 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
BEARISH
Average Polarity:
-0.6
Confidence:
1.0
Articles Analyzed:
32
Last Updated:
2026-07-04 23:52:45
Commodity Sentiment
CRUDE_OIL
-0.6
Top News Topics
Supply (1 articles)
Weather (1 articles)
- Asia Seems to Have Weathered Energy Price Shock Well — Market Talk Dow Jones Newswires
Economic Analysis
Fibonacci Analysis
Current Price:
$68.78
Closest Support:
$67.04
2.53% below current price
Closest Resistance:
$77.4
12.53% above current price
Fibonacci Retracement Levels
0.0
$67.04
Support
0.236
$77.4
Resistance
0.382
$83.81
0.5
$88.99
0.618
$94.16
0.786
$101.54
1.0
$110.93
Fibonacci Extension Levels
1.272
$122.87
1.618
$138.05
2.0
$154.82
2.618
$181.94
ML Price Prediction
Current Price:
$68.78
Forecast Generated:
2026-07-04 23:52:47
Next Trading Day:
UP 0.2%
| Date | Prediction | Lower Bound | Upper Bound |
|---|---|---|---|
| 2026-07-04 | $68.92 | $64.35 | $73.49 |
| 2026-07-05 | $68.77 | $64.21 | $73.34 |
| 2026-07-06 | $68.67 | $64.11 | $73.24 |
| 2026-07-07 | $68.7 | $64.13 | $73.27 |
| 2026-07-08 | $68.71 | $64.14 | $73.28 |
ML Insights
- Forecast generated using ARIMA(5, 1, 0).
- The model predicts a price increase of ~0.20% for the next trading day (2026-07-04), reaching $68.92.
- The 5-day forecast suggests relatively stable prices between 2026-07-04 and 2026-07-08.
- The average confidence interval width is ~13.3% of the predicted price, indicating model uncertainty.
- SIGNAL: Weak bullish signal, high uncertainty.
AI Analysis
For Energy Traders:
The recent price movements indicate a bullish sentiment with the OPEC Reference Basket rising to an average of $62.31/b. The $4.47/b rise in the Brent-WTI spread suggests a tightening in U.S. supply dynamics relative to global markets, which could present short-term trading opportunities.
However, the overall market sentiment remains bearish with a sentiment score of -0.600. Traders should be cautious of potential volatility, especially given the geopolitical uncertainties and news surrounding U.S.-Iran talks that could impact supply.
Key support levels should be monitored around the $60.00/b mark for WTI, while resistance may be seen near $65.00/b for Brent, indicating potential Fibonacci retracement levels that could guide trading strategies.
For Producers (Oil & Gas Companies):
The supply-demand balance indicates a steady demand forecast for DoC crude at 43.0 mb/d for 2026, which is encouraging for production planning. However, with production from DoC countries decreasing by 439 tb/d, this could lead to tighter market conditions, impacting pricing positively.
Producers should consider hedging strategies to mitigate risks associated with fluctuating prices, especially given the decline in refining margins due to increased feedstock prices and seasonal demand pressures.
The current inventory levels, with OECD crude inventories up by 6.5 mb, suggest that while short-term supply is stable, producers must remain agile to respond to changes in global demand and inventory shifts.
For Consumers (Industrial/Refineries/Transportation):
Consumers should prepare for potential input cost fluctuations as crude prices remain volatile. With WTI averaging $60.26/b and Brent at $64.73/b, procurement strategies may need to be adjusted to account for higher costs.
The supply reliability risks are heightened due to geopolitical factors and fluctuating inventories, particularly with U.S. imports aligning with the five-year average but facing potential disruptions from international markets.
Additionally, refining margins are under pressure, which could impact product pricing. Consumers should consider hedging options to lock in favorable prices amidst these uncertainties.
For Commodity Professionals (Analysts, Consultants):
The Crude Oil market is currently characterized by a mix of bearish sentiment and bullish technical indicators. The overall sentiment score of -0.600 suggests caution, while the increase in net long positions by hedge funds signifies underlying bullish trends.
Key driving factors include stable global oil demand growth forecasts at 1.4 mb/d for 2026, alongside a steady increase in non-DoC liquids production. However, refining margins are declining, indicating potential pressure on product prices.