The April WTI (CLJ25) trading session settled at 72.10 (+0.27) [+0.38%], a high of 72.91, a low of 71.69. Cash price is at 71.86 (+1.16), while open interest for CLJ25 is at 298,408. CLJ25 settled above its 5 day (71.41), below its 20 day (72.15), above its 50 day (71.64), above its 100 day (70.33), above its 200 day (71.48) and below its year-to date (73.00) moving averages. The COT report (Futures and Options Summary) as of 2/11/25 showed commercials with a net short position of -257,512 (a decrease in short positions by +16,534 from the previous week) and non-commercials who are net long +233,208 (a decrease in long positions by -11,736 from the previous week).
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The American Petroleum Institute estimates that U.S. crude oil inventories increased by +3.34 million barrels in the week prior, against a forecast of +2.2 million barrels. This is the fourth consecutive week of increased inventories reported.
The current Arctic Blast making its way through the United States and Europe has disrupted production in North Dakota, disrupting 150,000 barrels per day, the state’s Pipeline Authority estimates.
Saudi Arabia hosted U.S. Secretary of State Marco Rubio and Russia’s Foreign Minister Sergei Larov in what was the first meeting between top U.S. and Russian officials since January 2022. No Ukrainian or European Union officials were present during today’s four hour meeting. Kremlin representative Dmitry Peskov said in a statement that the meeting was mainly for setting “preparations for potential Ukraine peace talks.” Ukraine’s President Zelensky said he would be cancelling his scheduled visit to Saudi Arabia, saying “We are honest and we are open for peace talks but I have taken the decision of not visiting Saudi Arabia as I don’t want to create a false image,” Bloomberg News reported that it had seen a draft statement from the G-7 nations, which proposes lowering the current price cap on Russian crude oil (set at $60 per barrel). The statement is expected to be released on February 24th, according to Bloomberg. 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. Bloomberg also reported that, according to ship-tracking data, around 60% of the active “shadow fleet” tankers sanctioned by the Biden Administration in January have ceased transporting crude oil entirely.
Elsewhere Russian Officials said that Ukrainian drones had hit a pipeline in Kazakhstan that transports roughly 1% of global crude oil supply, carrying about 1.6 million barrels per day. The Russian oil company Transneft said transit volumes could be reduced by 30% and take up to two months to get completely back online.
Conflicting reports by Reuters and Bloomberg over the last few days via unnamed OPEC+ sources saying OPEC+ may delay production cuts further, while the former reports that that’s not going to be the case. Bloomberg reported that OPEC+ delegates are considering prolonging monthly supply increases set to begin in April. However this morning Reuters, citing unnamed OPEC+ delegates, disgusted this and Russian Deputy Prime Minister Alexander Novak told Russia’s RIA state news agency that “OPEC+ producers are not considering delaying” Currently OPEC+ is holding back 2.2 million barrels per day, the current plan is to gradually add 120,000 b/d starting in April. In total the 2.2 million b/d cut is just a fraction of the total 5.85 million b/d cut the Cartel has been withholding since 2022, which is about 5.7% of global supply. On the topic of Russian oil and OPEC+ Goldman Sachs says “We believe that Russia crude oil production is constrained by its OPEC+ 9.0 million barrels per day (mbpd) production target rather than current sanctions, which are affecting the destination but not the volume of oil exports,”
In other OPEC+ news, Brazil, the seventh-largest oil producer in the world, which produces about 4.3 million barrels per day accounting for about 4% of global production (according to the EIA), was approved by Brazil’s government to join OPEC+. It is being said that Brazil will not face any binding production cuts.
Last week’s 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. Total U.S. oil production hit 13.494 million barrels b/d, about 200,000 b/d lower than the all-time high set in December 2024. 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. Last Friday’s Baker Hughes Oil and Gas Rig Count showed rigs increasing by 2, to a total of 588, the third consecutive week of rig increases, although seasonally still about 5% below average and down 33 rigs compared to this time last year.
The S&P, Dow Jones and Nasdaq indexes finished higher, while the U.S. Dollar Index closed higher by +0.44%. China’s Shanghai 300 Index rose +0.70%.
Price Thoughts – Continuing the bullish turnaround today after a sharp weekly decline in crude futures last week after larger than expected U.S. inventory builds and increased Ukrainian ceasefire talk which prompted more thinking about the Russian sanctions being taken off and the increased oil production that that would bring about. The Ukrainian ceasefire was met with some headwinds this morning after Ukraine attacked a Russian controlled oil pipeline in Kazakhstan that carries roughly 1% of global crude production daily and President Zelensky said he would not attend peace talks in Saudi Arabia. I expect lots of unpredictable volatility here in the short and medium term as tariff talks, war headlines out of Ukraine and the Middle East, and the mishmash of low reserves-high production continue — and on top of all that there’s the Arctic Blast still spreading below freezing temperatures across most of the U.S. and Europe.
There has been support near $70 (which held again week after being tested), below that $67.50 and 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.
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Jim Rinaudo
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