The April WTI (CLJ25) trading session settled at 71.24 (-1.84) [-2.52%], a high of 73.00, a low of 71.03. Cash price is at 73.32 (+0.94), while open interest for CLJ25 is at 239,574. CLJ25 settled below its 5 day (71.46), below its 20 day (73.09), below its 50 day (71.36), above its 100 day (70.22), below its 200 day (71.55) and below its year-to date (73.21) moving averages. The COT report (Futures and Options Summary) as of 2/7/25 showed commercials with a net short position of -274,046 (a decrease in short positions by +33,610 from the previous week) and non-commercials who are net long +244,944 (a decrease in long positions by -36,265 from the previous week).
If you would like to receive more information on the commodity markets, please use the link to join our email list Sign Up Now
Today’s weekly Energy Information Administration Petroleum data for the week ending February 7, 2025 showed U.S. crude oil imports averaging 6.3 million barrels per day, a decrease of -606,000 b/d from the previous week. U.S. commercial crude oil inventories increased by +4.1 million barrels, to a total of 427.9 million barrels, about 4% below the five-year seasonal average. U.S. crude oil refinery inputs averaged 15.4 million b/d, an +82,000 barrel increase from the week prior. U.S. refineries operated at 85% capacity. The Cushing, Oklahoma hub had a build of 872,000 barrels. This was the third consecutive week the EIA has reported commercial crude inventory builds, and the largest inventory build so far in 2025 after beating last week’s +3.46 million barrel build. Yesterday’s American Petroleum Institute’s weekly report estimated U.S. inventories with a +9.043 million barrel build (against a +2.8 mb forecast) while the Cushing, Oklahoma hub had a build of +407,000 barrels.
The U.S. Energy Information Administration’s latest Short-Term Energy Outlook was released yesterday. They raised their 2025 crude oil production forecast slightly, previously from 13.55 million barrels per day to the current 13.59 million b/d forecast. Their 2026 outlook on crude production also increased from 13.62 million barrels per day to 13.73 million b/d. They predict U.S. refinery output decreases by 190,000 barrels per day in 2025 and 180,000 b/d in 2026. They left their 2025 Brent average price forecast of $74 relatively unchanged from last month’s Short-Term Energy Outlook report. In terms of their 2025 global inventory outlook the EIA said, “We still anticipate that global oil inventories will fall by 0.5 million b/d in the first quarter of 2025 (1Q25) because of OPEC+ production cuts, which the organization recently reaffirmed. However, we expect global oil inventories will begin increasing once OPEC+ begins raising production, starting in April 2025. These production increases combined with expectations of relatively weak global oil demand growth will lead to a 0.9 million b/d increase in global oil inventories in the second half of 2025 (2H25) and a 1.0 million b/d increase in 2026”.
President Trump posted on his Truth Social platform that he had “a lengthy and highly productive phone call” with Russian President Putin, adding that they had agreed to “have our respective teams start negotiations immediately.” Following that, President Trump spoke with President Zelensky, stating, “He, like President Putin, wants to make PEACE. We discussed a variety of topics related to the war, but mostly the upcoming meeting on Friday in Munich, where Vice President JD Vance and Secretary of State Marco Rubio will lead the delegation. I am hopeful that the results of that meeting will be positive. It’s time to stop this ridiculous war.” This statement follows an interview earlier in the week with President Zelensky, where he suggested he would consider exchanging territory with Russia as part of a deal to end the conflict. U.S. Treasury Secretary Scott Bessent is expected to meet with Zelensky soon, possibly later this week. Bloomberg reported that Russia’s crude oil production dipped to 8.962 million barrels per day in January. Russia has been faced with increased logistical problems since the U.S.’s latest sanctions on Russian oil shipments to China and India. Russia’s January production came in 16,000 barrels below its agreed upon OPEC+ quota.
The U.S. Energy Information Administration (EIA) also released an in-depth estimate on China’s 2024 crude oil import and refinery data. The EIA estimates China imported 11.1 million barrels per day in 2024, down from 11.3 b/d in 2023, nearly a 2% decline, while China’s domestic crude production averaged 4.3 million b/d. Chinese refiners imports from Russia increased for a third consecutive year, averaging 2.2 million b/d, with a 1% increase from 2023. China’s imports from Saudi Arabia, their second-largest crude oil source, decreased for the third consecutive year, averaging 1.6 million b/d, a drop of 9% compared to 2023. The EIA predicts China’s consumption will outpace China’s domestic production, leading to net imports increasing for 2025 and 2026. China’s 10% levying on crude oil from the United States took effect Monday, as well as 15% tariffs on coal and LNG imports. China’s Shanghai based CSI 300 Index rose +0.95%.
In OPEC+’s monthly report the cartel stuck to both of its global oil demand forecasts from last month for 2025 and 2026. For 2025 OPEC+ expects demand to rise by +1.45 million barrels per day, and increase by +1.43 million b/d for 2026.
Over the weekend, President Trump demanded that Hamas release all remaining Israeli hostages or face the end of the Israel-Hamas ceasefire agreement by this Saturday. Following this Hamas issued a statement on Telegram on Monday announcing it had suspended the next hostage release due to Israel’s delaying of displaced Palestinians into Gaza and blocking supplies from entering the Strip over the last three-week period. Prime Minister Netanyahu responded yesterday, saying, “In light of Hamas’ decision to violate the agreement and not release our hostages, last night I ordered the IDF to assemble forces around and within the Gaza Strip. This operation is underway and will be completed soon. The cabinet’s decision is clear: if Hamas does not return our hostages by noon on Saturday, the ceasefire will end, and the IDF will resume intense fighting until Hamas is defeated.” while Israel’s Defense Minister, Israel Katz, condemned this as a “complete violation” of the agreement.
Oil Price reported that imports of Mexico’s crude oil by U.S. refiners decreased by 40% month-over-month, to less than 600,000 barrels per day, as Gulf Coast refiners have begun seeking other sources of similar graded oil.
On Monday, President Trump enacted a 25% tariff on all steel and aluminum imports. In response, the European Union declared it would implement “firm and proportionate” countermeasures. Maros Sefcovic, the E.U.’s leading trade official, held a phone conversation with U.S. counterpart Howard Lutnick this morning, prior to a meeting of EU ministers to determine the appropriate response to President Trump’s recent tariffs on steel and aluminum. Headline CPI was shown to have increased for the 7th straight month, coming in slightly hotter than expected, with the energy index rising 1.1% over the last month, within that the gasoline index rose 1.8%. Addressing the Senate Banking Committee yesterday Fed Chair Powell said “we do not need to be in a hurry to adjust our policy stance” and that overall the economy is “strong”, but he cautioned that inflation continues to ease above the Fed’s 2% goal. Tomorrow’s January Producer Price Index and new weekly initial jobless claims reports will offer another read on U.S. inflation. This week much of the Northern Hemisphere will continue to face subfreezing temperatures as the current Arctic Blast system persists. The S&P, Dow Jones and Nasdaq indexes had another hoppy sideways trade, as did the U.S. Dollar Index closing higher by +0.01%.
Price Thoughts – The builds in commercial U.S. crude inventories shown today in the EIA report stalled the rally we we’re on like I anticipated after API’s huge estimate last night. Other than that news-wise there was not much change other than some positive steps taken from all parties involved in the Ukrainian war, which I think is bearish for crude oil if sanctions come off Russia and they get their energy market back to capacity, but that’s down the line. We broke through our 5-50-200 day moving averages to the downside today, which could fuel a sell off to the support near $70 this week, below that $67.50and below that $65 has been a major support figure over the last year.To the upside there’s resistance near $74.50 and the upper $79.50 region. Longer term I think we are still leaning more into the $65-$80 range rather than the $70-$85 range for 2025 for WTI.
If you would like to receive more information on the commodity markets, please use the link to join our email list Sign Up Now
You can reach me at – [email protected]
Follow Walsh Trading on X – @Walsh_trading
Jim Rinaudo
312-957-4731
Walsh Trading
311 S Wacker Suite 540
Chicago, IL 60606
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices.PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.