Crude Oil Radar

2025-10-16 12:15

Table of Contents

Brian's Thoughts

Published: 10/16/2025 Focus: Crude Oil
After a massive risk-off shift on Friday with Israel-Hamas ceasefire with hostages from both sides of the conflict being returned (thankfully!!), the crude market and other energy markets decided to take this as a queue that the geopolitical premium needs to disappear and WTI broke below $60 - breaking the ever critical 61.64 support. Brent is still hovering over $63 while WTI sits at 59.57 - this is set for a further drop down. We will likely see $53 soon unless other conflict, attacks, or the Russia-Ukraine war intensifies. Most traders are now looking at demand only - which has been better than expected this year (albeit propped up from China building out their SPR). 61.64 and 57.35 are the range - and I expect the latter to be tested this week as we collapse under a bearish sentiment for economy and crude demand.

Today's Update

Updated: 2025-10-16 12:11:51 Length: 480 chars
Crude oil prices have recently taken a nosedive, with WTI falling below $60 and breaking crucial support at $61.64. The geopolitical premium, previously buoyed by conflicts, is dissipating, pushing WTI towards potential lows of $53. Demand remains a mixed bag—bolstered by China's strategic reserves but overshadowed by a bearish economic outlook. Meanwhile, the U.S. inventory build adds pressure to prices. As traders adjust their focus, keep an eye on key levels: $61.64 and...

Market Summary

Technical Outlook

Moderately Bearish
Score: -2/5
Short: SELL | Medium: SELL | Long: SELL

International Prices

Brent: $61.91 $0.48
WTI: $58.27 $0.43
Spread: $3.64 (Brent premium of $3.64)

Key Fundamentals

Crude Stocks: N/A (0)
Net Imports: N/A (0)

News Sentiment

BEARISH

Spec Positioning

Net Position: 26,483
Weekly Change: 10,316

Technical Analysis

Overall Technical Score (-5 to +5): -2 (Moderately Bearish)
Current Price: $58.3
Signal: Moderately Bearish

Moving Averages (9/20)

BEARISH

MA(9): $60.13

MA(20): $61.73

Current Price is 58.3, 9 day MA 60.13, 20 day MA 61.73

MACD (12, 26, 9)

BEARISH

MACD: -1.318

Signal: -0.9208

Days since crossover: 12

MACD crossed the line 12 days ago and is in a bearish setup

RSI (14)

NEUTRAL

Value: 34.48

Category: NEUTRAL

RSI is 34.48 (note 70% is overbought and 30% is oversold)

Volume (vs 20d Avg)

LOWER

Current: 101,777

Avg (20d): 253,723

Ratio: 0.4

Volume is lower versus 20 day average

Stochastic (14, 3)

OVERSOLD

%K: 12.78

%D: 10.4

Stochastic %K: 12.78, %D: 10.4. Signal: oversold

ADX (14)

WEAK TREND

ADX: 21.96

+DI: 12.01

-DI: 35.23

ADX: 21.96 (+DI: 12.01, -DI: 35.23). Trend: weak trend

Williams %R (14)

OVERSOLD

Value: -87.22

Williams %R: -87.22 (oversold)

Bollinger Bands (20, 2)

BELOW MIDDLE

Upper: 66.06

Middle: 61.73

Lower: 57.39

Price vs BBands (20, 2): below middle. Upper: 66.06, Middle: 61.73, Lower: 57.39

Fundamental Analysis

Category Current Last Week Last Year 3 Yr Avg
Crude Production (Thousand Barrels a Day) 13636.0 13629.0 13400.0 12900.0
Crude Imports (Thousand Barrels a Day) 5525.0 6403.0 6239.0 5793.0
Crude Exports (Thousand Barrels a Day) 4466.0 3590.0 3794.0 4520.67
Refinery Inputs (Thousand Barrels a Day) 15130.0 16297.0 15590.0 15567.0
Net Imports (Thousand Barrels a Day) 1059.0 2813.0 2445.0 1272.33
Commercial Crude Stocks (Thousand Barrels) 423785.0 420261.0 422741.0 425885.0
Crude & Products Total Stocks (Thousand Barrels) 1696565.0 1694142.0 1641911.0 1628273.33
Gasoline Stocks (Thousand Barrels) 218826.0 219093.0 214898.0 215122.0
Distillate Stocks (Thousand Barrels) 117030.0 121559.0 118513.0 111646.33

International Price Analysis

International Price Summary

Brent crude (DEC 25) settled at $61.91, change $-0.48. WTI crude (NOV 25) settled at $58.27, change $-0.43. The Brent-WTI spread is currently $3.64 (Brent premium of $3.64). The Brent-WTI spread reflects differences in global vs. U.S. supply/demand dynamics, geopolitics, and transportation costs.

Brent Crude

$61.91
0.48
(DEC 25)

WTI Crude

$58.27
0.43
(NOV 25)

Brent-WTI Spread

$3.64
Brent premium of $3.64

OPEC Analysis

OPEC Market Analysis

Executive Summary:

The current OPEC market situation reflects a delicate balance between production and demand, with global oil demand projected to grow steadily while production from non-DoC countries continues to increase. The OPEC Reference Basket price has shown slight fluctuations, indicating ongoing market volatility amidst stable economic growth forecasts.

Key Market Metrics:

Category Production (mb/d) Demand (mb/d)
World Production
  • Americas: 25.19
  • Europe: 13.51
  • Asia Pacific: 7.13
  • Total OECD: 45.83
  • China: 16.85
  • India: 5.70
  • Other Asia: 9.89
  • Latin America: 6.89
  • Middle East: 9.01
  • Africa: 4.80
  • Russia: 4.02
  • Other Eurasia: 1.31
  • Other Europe: 0.82
  • Total Non-OECD: 59.31
  • Americas Demand: 25.19
  • Europe Demand: 13.51
  • Asia Pacific Demand: 7.13
  • Total OECD Demand: 45.83
  • China Demand: 16.85
  • India Demand: 5.70
  • Other Asia Demand: 9.89
  • Latin America Demand: 6.89
  • Middle East Demand: 9.01
  • Africa Demand: 4.80
  • Russia Demand: 4.02
  • Other Eurasia Demand: 1.31
  • Other Europe Demand: 0.82
  • Total Non-OECD Demand: 59.31
  • Total World Demand: 105.14

Supply-Demand Balance Analysis:

The balance of supply and demand indicates a potential surplus in the market, with total world production at approximately 105.14 mb/d against a demand of 105.14 mb/d. This equilibrium suggests that while the market is stable, any significant increase in demand or production could lead to volatility in oil prices.

Production Landscape:

In 2025, the major contributors to global oil production include the United States, Brazil, Canada, and Argentina, particularly within the non-DoC framework. The DoC countries have increased their crude oil production to approximately 43.05 mb/d, indicating a slight upward trend in their output.

Demand Patterns:

Demand growth is primarily driven by non-OECD countries, with China and India leading the way. The OECD region shows modest growth, indicating a shift in consumption patterns towards emerging markets. The overall demand forecast for 2025 remains stable, with an increase of about 1.3 mb/d expected.

Non-DoC vs DoC Analysis:

Non-DoC production is projected to grow by 0.8 mb/d in 2025, significantly outpacing the DoC production growth of 0.1 mb/d. This trend underscores the increasing influence of non-DoC countries on the global oil supply landscape, potentially challenging OPEC's market share.

OPEC's Strategic Position:

OPEC's current market position appears stable, with a slight increase in production from member countries. However, the growing output from non-DoC countries poses a strategic challenge, necessitating careful monitoring and potential adjustments in production policies to maintain market stability.

Forward-Looking Indicators:

Looking ahead, the market is likely to experience continued demand growth, particularly in Asia. However, any geopolitical tensions or economic disruptions could impact both supply and demand dynamics, leading to price volatility in the coming months.

Key Insights and Recommendations:

  • Monitor non-DoC production closely as it continues to rise, potentially affecting OPEC's market share.
  • Consider strategic adjustments in production levels to respond to shifts in global demand, particularly from emerging markets.
  • Maintain flexibility in pricing strategies to navigate potential market volatility.
  • Enhance collaboration among OPEC members to ensure cohesive responses to market changes.
  • Invest in market intelligence to better anticipate shifts in demand patterns and geopolitical risks.

CFTC CoT Analysis

Sentiment: Bullish but Weakening
Positioning: Normal Range
Report Date: 2025-09-23

Managed Money

26,483
Change: -10,316
1.4% of OI

Producer/Merchant

283,712
Change: -9,029
14.6% of OI

Swap Dealers

-402,312
Change: +5,178
-20.8% of OI

Open Interest

1,936,690
Change: -25,930

Summary Analysis:

CFTC Commitment of Traders Report (Disaggregated) as of 2025-09-23

Crude Oil Positioning (WTI-PHYSICAL - NYMEX):

Open Interest: 1,936,690 contracts (-25,930)

Managed Money Net Position: 26,483 contracts (1.4% of OI)

Weekly Change in Managed Money Net: -10,316 contracts

Producer/Merchant Net Position: 283,712 contracts

Swap Dealer Net Position: -402,312 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: 68
Last Updated: 2025-10-16 12:14:47

Commodity Sentiment

CRUDE_OIL

-0.6

Top News Topics

Supply (3 articles)

Demand (1 articles)

Geopolitical (3 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: Moderate market volatility

Economic Indicators

USD_INDEX

98.48
Daily: -0.31 (-0.32%)
Weekly: -0.5 (-0.51%)

US_10Y

4.02
Daily: -0.03 (-0.67%)
Weekly: -0.03 (-0.79%)

SP500

6668.85
Daily: -2.21 (-0.03%)
Weekly: 116.34 (1.78%)

VIX

21.74
Daily: 1.1 (5.33%)
Weekly: 0.08 (0.37%)

GOLD

4287.9
Daily: 111.0 (2.66%)
Weekly: 312.0 (7.85%)

COPPER

5.0
Daily: 0.03 (0.56%)
Weekly: 0.15 (3.12%)

Fibonacci Analysis

Current Price: $58.3
Closest Support: $57.26 1.78% below current price
Closest Resistance: $60.39 3.58% above current price

Fibonacci Retracement Levels

0.0 $57.26 Support
0.236 $60.39 Resistance
0.382 $62.32
0.5 $63.89
0.618 $65.45
0.786 $67.67
1.0 $70.51

Fibonacci Extension Levels

1.272 $74.11
1.618 $78.7
2.0 $83.76
2.618 $91.95

ML Price Prediction

Current Price: $58.27
Forecast Generated: 2025-10-16 12:14:51
Next Trading Day: UP 0.37%
Date Prediction Lower Bound Upper Bound
2025-10-16 $58.49 $56.44 $60.54
2025-10-17 $58.58 $56.53 $60.63
2025-10-18 $58.61 $56.56 $60.66
2025-10-19 $58.69 $56.64 $60.73
2025-10-20 $58.69 $56.64 $60.74

ML Insights

  • Forecast generated using ARIMA(5, 1, 0).
  • The model predicts a price increase of ~0.37% for the next trading day (2025-10-16), reaching $58.49.
  • The 5-day forecast suggests relatively stable prices between 2025-10-16 and 2025-10-20.
  • The average confidence interval width is ~7.0% of the predicted price, indicating model uncertainty.
  • SIGNAL: Bullish signal, moderate uncertainty.

AI Analysis

💹

For Energy Traders:

The current market dynamics indicate potential bearish pressure on crude oil prices. The $61.91 for Brent and $58.27 for WTI suggest a narrowing support level around these prices. The Fibonacci levels may reveal critical resistance zones, particularly if prices approach the recent highs.

The $3.64 Brent-WTI spread reflects ongoing supply/demand dynamics, indicating a stronger global demand for Brent relative to WTI. Traders should watch for volatility in response to geopolitical tensions and inventory fluctuations, particularly with the bearish sentiment reflected in the CFTC positioning data where managed money has shifted to a net short stance.

⛽

For Producers (Oil & Gas Companies):

Producers should consider adjusting their hedging strategies in light of the current bearish sentiment and inventory levels. With OECD crude stocks at 1,316 mb, significantly below the five-year average, there are implications for production planning and market responsiveness.

The anticipated growth in non-DoC liquids production, particularly from the US and Brazil, highlights the need for producers to remain agile. The balance of supply and demand forecasts indicate a steady demand for DoC crude, which may provide a buffer against price declines.

🏭

For Consumers (Industrial/Refineries/Transportation):

Consumers should prepare for potential input cost fluctuations, particularly with Brent at $61.91 and WTI at $58.27. The supply reliability risks due to geopolitical tensions could impact procurement strategies.

The tightening of diesel markets and increased refinery margins indicate potential for higher costs in refined products. Consumers should consider hedging against future price increases, especially with the current bearish sentiment prevailing in the market.

📊

For Commodity Professionals (Analysts, Consultants):

The Crude Oil market is currently influenced by several key factors: a stable global economic growth forecast, ongoing bearish sentiment, and a mixed outlook on supply dynamics. The bearish sentiment, as indicated by a sentiment score of -0.600, reflects concerns over a potential supply glut.

The fundamental balance suggests that while demand remains steady, the oversupply from non-DoC producers could lead to price pressures. Analysts should closely monitor CFTC positioning and geopolitical developments that could shift market sentiment in the coming weeks.

Disclaimer: This analysis is for informational purposes only and does not constitute financial advice or specific buy/sell recommendations.

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