The March WTI (CLH25) trading session settled at 76.37 (-0.93) [-1.20%], a high of 77.51, a low of 76.20. Cash price is at 78.87 (+2.30), while open interest for CLH25 is at 346,108. CLH25 settled above its 5 day (75.11), above its 20 day (71.70), above its 50 day (69.91), above its 100 day (69.55), above its 200 day (72.26) and above its year-to date (74.20) moving averages. The COT report (Futures and Options Summary) as of 1/7/25 showed commercials with a net short position of -303,372 (an increase in short positions by -28,304 from the previous week) and non-commercials who are net long +298,230 (an increase in long positions by +24,900 from the previous week).
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A new story from Bloomberg stated that “Members of President-elect Donald Trump’s incoming economic team are discussing slowly ramping up tariffs month by month, a gradual approach aimed at boosting negotiating leverage while helping avoid a spike in inflation, according to people familiar with the matter”. It’s being speculated that the Trump team will increase tariffs by 2%-5% per month, per Bloomberg sources. The U.S. Labor Department put out the latest Producer Price Index figures this morning, which showed an +0.2% increase in December from November, down from the +0.4% figure in November, year-over-year producer prices rose +3.3%. There was an increase in wholesale energy prices by +3.5% from November-to-December, headed by a +9.7% in gasoline prices. The U.S. Dollar Index closed lower by -0.68%.
The Energy Information Administration (EIA) released their Short-Term Energy Outlook report this morning, with the EIA raising their 2025 production estimate for the U.S. to 13.55 million barrels per day, up from their previous estimate of 13.52 million barrels per day. For 2024 the EIA lowered its forecast for U.S. production to 13.21 million barrels per day, down from the previous 13.24 barrels per day forecast.
In the Mideast, the Associated Press reported that Hamas has accepted a draft for a ceasefire agreement in Gaza and the release of the remaining Israeli-held hostages. As of now, there has been no comment from Israel’s Prime Minister Netanyahu. However, CNN has stated that, according to an Israeli official, Netanyahu is scheduled to hold an urgent meeting with top security officials on Tuesday night.
Last Friday, the U.S. Treasury imposed new sanctions on Russian oil giants Gazprom and Surgutneftegaz, as well as 183 oil tankers, often referred to as Russia’s ‘Shadow Fleet.’ In 2024, Gazprom and Surgutneftegaz were responsible for shipping around 970,000 barrels per day, primarily to refineries in India and China. Citigroup Inc. estimates that up to 30% of the shadow fleet could be impacted by these sanctions, while Goldman Sachs projects that these tankers transport about 25% of Russia’s oil exports. The announcement during Friday’s trading session pushed oil prices to four-month highs.
Chinese government data released yesterday revealed that the country’s exports reached a record high in 2024, growing by 7.1% to total $3.58 trillion. Additionally, China’s trade surplus reached a new all-time high of $990 billion. Saudi Aramco is set to sell roughly 43.5 million barrels to China next month, down from the 46 million barrels being delivered this month. On Friday China will release fourth-quarter and full-year GDP, in addition to industrial production data. China will be on a week-long holiday for the Lunar New Year starting January 28th. The Shanghai based CSI 300 index skyrocketed today closing higher by +2.63%.
AccuWeather predicts the coldest temps of January will hit this week and next week for the Northern Hemisphere. AccuWeather’s Senior Meteorologist Breet Anderson said “An Arctic blast prior to the end of the month (Jan. 20-24) has the potential to sprawl over much of the Central and Eastern states,”. After this Arctic blast passes next week AccuWeather predicts temperatures will begin to warm modestly in February.
American Petroleum Institute’s weekly data will be released later today. Tomorrow U.S. Consumer Price Index and EIA data is released. Thursday we get the latest U.S. Jobless Claims numbers. OPEC+’s first monthly report of the year is expected to be released this week.
Price Thoughts – I think we saw some long’s taking profits today after such a high run up since Friday. Fresh COT data showed crude oil longs in WTI and Brent contracts hitting an eight-month high. I think we have short term support at $75, with short term resistance near the upper $78 region, beyond that there’s a chance, in my opinion, we could make a run towards the upper resistance point of ~$85, but a round figure like $80 could be enough of mental resistance of its own. To the downside below $75 near the 200 day MA and $72.50 offers support and below that $65 is a major support figure. I wonder if OPEC+ will usher in their delayed production sooner than April if WTI and Brent prices continue on the up trend into next month, as they currently are holding back 5.86 million barrels per day (~5.7% of global demand). I expect prices to take cues from an important week of API and EIA S/D information.
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Jim Rinaudo
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