Crude Oil Radar

2025-10-21 23:49

Table of Contents

Brian's Thoughts

Published: 10/21/2025 Focus: Crude Oil
After multiple tests of support levels, Crude Oil broke below 61.64 in early October which brought on the slide to the mid $50s (something that we have been talking about for months). The fundamentals are simply bearish when you take into consideration that the only reason that we don't have surpluses in global inventories is because China has been building and filling their Strategic Petroleum Reserve which is estimated to consume currently over 2 MMBPD. Bear in mind, if we had those barrels in the market, I doubt OPEC+ would be releasing barrels and crude prices would likely be $10 lower (yes that means in the $40s). In my humble opinion there is no geopolitical risk premium left - traders have slowly taken that premium out piece by piece.....now that does NOT MEAN that when we have peace deals that crude will not drop - IT WILL - but I see that as good positioning for long term accumulation. This week, the bull bear line rests at 57.35 and we already are trading below that level - yet I think it will serve as a magnet. 53.87 is likely in the cards but we may be due for a retracement and re-test of 60 - only question is which one hits first??? Something tells me that we are not ready for a retracement...yet...57.35 remains the bull/bear line

Today's Update

Updated: 2025-10-21 23:46:24 Length: 527 chars
Crude Oil has slipped below $61.64, a key support level, leading to a decline into the mid-$50s. The bearish fundamentals stem from China's strategic reserve accumulation, which currently absorbs over 2 MMBPD, masking a potential surplus. With geopolitical risk premiums dissipating, the market may be primed for a long-term accumulation strategy. Current trading sentiment hovers around the bull-bear line of $57.35, suggesting possible retracements, with $53.87 in sight, but a bounce back to $60 could be due—if we’re lucky!

Market Summary

Technical Outlook

Moderately Bearish
Score: -3/5
Short: SELL | Medium: SELL | Long: SELL

International Prices

Brent: $61.01 $0.28
WTI: $57.52 $0.02
Spread: $3.49 (Brent premium of $3.49)

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): -3 (Moderately Bearish)
Current Price: $58.2
Signal: Moderately Bearish

Moving Averages (9/20)

BEARISH

MA(9): $58.62

MA(20): $60.91

Current Price is 58.2, 9 day MA 58.62, 20 day MA 60.91

MACD (12, 26, 9)

BEARISH

MACD: -1.5278

Signal: -1.222

Days since crossover: 15

MACD crossed the line 15 days ago and is in a bearish setup

RSI (14)

NEUTRAL

Value: 36.8

Category: NEUTRAL

RSI is 36.8 (note 70% is overbought and 30% is oversold)

Volume (vs 20d Avg)

LOWER

Current: 17,000

Avg (20d): 239,963

Ratio: 0.07

Volume is lower versus 20 day average

Stochastic (14, 3)

BULLISH CROSS

%K: 28.16

%D: 20.03

Stochastic %K: 28.16, %D: 20.03. Signal: bullish cross

ADX (14)

STRONG DOWNTREND

ADX: 27.54

+DI: 12.56

-DI: 32.87

ADX: 27.54 (+DI: 12.56, -DI: 32.87). Trend: strong downtrend

Williams %R (14)

NEUTRAL

Value: -71.84

Williams %R: -71.84 (neutral zone)

Bollinger Bands (20, 2)

BELOW MIDDLE

Upper: 66.01

Middle: 60.91

Lower: 55.81

Price vs BBands (20, 2): below middle. Upper: 66.01, Middle: 60.91, Lower: 55.81

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 $61.01, change $-0.28. WTI crude (NOV 25) settled at $57.52, change $-0.02. The Brent-WTI spread is currently $3.49 (Brent premium of $3.49). The Brent-WTI spread reflects differences in global vs. U.S. supply/demand dynamics, geopolitics, and transportation costs.

Brent Crude

$61.01
0.28
(DEC 25)

WTI Crude

$57.52
0.02
(NOV 25)

Brent-WTI Spread

$3.49
Brent premium of $3.49

OPEC Analysis

OPEC Market Analysis

Executive Summary:

The current OPEC market situation reflects a modest increase in crude oil prices, with the OPEC Reference Basket averaging $70.39/b in September. Global oil demand is projected to grow steadily, while production from non-DoC countries continues to rise, posing challenges for OPEC's market share.

Key Market Metrics:

Category Production (mb/d) Demand (mb/d)
World Production 105.135 105.135
Non-DoC Production 51.439 -
DoC Production 43.05 -

Supply-Demand Balance Analysis:

The global oil market is currently balanced, with total production aligning closely with demand at approximately 105.135 mb/d. However, the increasing non-DoC production, particularly from the US, poses a risk of oversupply, which could lead to downward pressure on prices if demand does not keep pace.

Production Landscape:

OPEC's production, particularly from member countries, has seen a slight increase to 43.05 mb/d. The US leads non-DoC production at 22.067 mb/d, followed by Canada and Brazil, indicating a robust production landscape outside OPEC. This trend highlights the competitive nature of the global oil market.

Demand Patterns:

Global oil demand is forecasted to grow by 1.3 mb/d in 2025, with significant contributions from non-OECD countries, particularly China and India. The OECD regions are expected to see modest growth, indicating a shift in demand dynamics towards emerging markets.

Non-DoC vs DoC Analysis:

Non-DoC production stands at 51.439 mb/d, significantly outpacing DoC production at 43.05 mb/d. This disparity underscores the challenges OPEC faces in maintaining its market share amidst rising output from non-member countries.

OPEC's Strategic Position:

OPEC's current market position is one of cautious optimism, with a stable demand forecast and slight production increases. However, the organization must navigate the complexities of rising non-DoC production and potential price volatility in the coming months.

Forward-Looking Indicators:

As we look ahead, OPEC may need to consider adjusting production levels to counterbalance the increasing output from non-DoC countries. Additionally, monitoring global economic indicators will be crucial in anticipating shifts in demand.

Key Insights and Recommendations:

  • Monitor non-DoC production closely, especially from the US and Brazil, as it poses a significant challenge to OPEC's market share.
  • Consider strategic production adjustments to maintain price stability amidst rising supply.
  • Focus on strengthening relationships with key demand regions, particularly in Asia, to enhance market presence.
  • Stay vigilant regarding global economic trends that could impact oil demand forecasts.
  • Evaluate the potential for collaborative efforts with non-DoC producers to stabilize the market.

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: 40
Last Updated: 2025-10-21 23:48:58

Commodity Sentiment

CRUDE_OIL

-0.6

Top News Topics

Supply (5 articles)

Economic Analysis

Economic Sentiment Summary

NEUTRAL - Mixed economic signals
Dollar Impact: Strong USD may pressure commodity prices
Industrial Demand: Weaker industrial demand signals
Interest Rate Impact: Stable/lower rates may support demand
Risk Sentiment: Low market volatility/risk appetite

Economic Indicators

USD_INDEX

98.9
Daily: 0.31 (0.32%)
Weekly: 0.11 (0.11%)

US_10Y

3.96
Daily: -0.02 (-0.58%)
Weekly: -0.08 (-2.05%)

SP500

6735.35
Daily: 0.22 (0.0%)
Weekly: 64.29 (0.96%)

VIX

17.87
Daily: -0.36 (-1.97%)
Weekly: -2.77 (-13.42%)

GOLD

4145.8
Daily: -190.6 (-4.4%)
Weekly: -31.1 (-0.74%)

COPPER

4.96
Daily: -0.04 (-0.79%)
Weekly: -0.01 (-0.27%)

Fibonacci Analysis

Current Price: $58.2
Closest Support: $56.35 3.18% below current price
Closest Resistance: $59.69 2.56% above current price

Fibonacci Retracement Levels

0.0 $56.35 Support
0.236 $59.69 Resistance
0.382 $61.76
0.5 $63.43
0.618 $65.1
0.786 $67.48
1.0 $70.51

Fibonacci Extension Levels

1.272 $74.36
1.618 $79.26
2.0 $84.67
2.618 $93.42

ML Price Prediction

Current Price: $57.82
Forecast Generated: 2025-10-21 23:49:00
Next Trading Day: UP 0.14%
Date Prediction Lower Bound Upper Bound
2025-10-22 $57.9 $55.97 $59.83
2025-10-23 $57.95 $56.02 $59.88
2025-10-24 $57.95 $56.02 $59.88
2025-10-25 $57.93 $56.0 $59.86
2025-10-26 $57.9 $55.97 $59.83

ML Insights

  • Forecast generated using ARIMA(5, 1, 0).
  • The model predicts a price increase of ~0.14% for the next trading day (2025-10-22), reaching $57.90.
  • The 5-day forecast suggests relatively stable prices between 2025-10-22 and 2025-10-26.
  • The average confidence interval width is ~6.7% of the predicted price, indicating model uncertainty.
  • SIGNAL: Bullish signal, moderate uncertainty.

AI Analysis

💹

For Energy Traders:

The recent bearish sentiment in the crude oil market, reflected by the overall sentiment score of -0.600, suggests potential downward pressure on prices. The Brent-WTI spread of $3.49 indicates a persistent premium for Brent, likely due to stronger global demand relative to U.S. supply dynamics.

Traders should monitor support levels around $63.53 (NYMEX WTI) and $67.58 (ICE Brent). The flattening forward curves signal potential volatility in the short term, especially given the ongoing bearish positioning of 26,483 contracts in managed money, which indicates a weakening bullish trend.

⛽

For Producers (Oil & Gas Companies):

With crude inventories showing a decrease of 10.4 mb month-on-month, producers should consider hedging strategies to mitigate risks associated with price fluctuations. The balance of supply and demand remains tight, particularly for DoC crude, which may stabilize prices around $70.39 for the OPEC Reference Basket.

The bearish market sentiment could impact production planning, urging producers to adjust output levels to align with demand forecasts, particularly as global oil demand is projected to grow by 1.3 mb/d in 2025.

🏭

For Consumers (Industrial/Refineries/Transportation):

Consumers should prepare for potential input cost fluctuations as WTI and Brent prices remain volatile. The $67.58 average for Brent and $63.53 for WTI indicate a need for strategic procurement, especially with the bearish sentiment prevailing in the market.

Supply reliability risks are heightened due to geopolitical factors and the tightening of product markets, particularly in diesel and gasoline. Continuous monitoring of crude and product inventory levels will be crucial for timely procurement decisions.

📊

For Commodity Professionals (Analysts, Consultants):

The Crude Oil market is currently characterized by a bearish sentiment and mixed positioning among traders. Key factors driving this sentiment include a tightening supply-demand balance and a significant drop in crude and product inventories, with OECD crude stocks down by 10.4 mb.

Analysts should note the impact of economic growth forecasts remaining stable at 3.0% for 2025, which supports moderate demand growth of 1.3 mb/d. However, the persistent net short positioning among managed money traders indicates potential headwinds and necessitates close monitoring of market dynamics for any shifts in outlook.

Disclaimer: This analysis is for informational purposes only and should not be construed as financial advice or specific buy/sell recommendations.

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