The March WTI (CLH25) trading session settled at 72.53 (-0.20) [-27%], a high of 73.49, a low of 71.94. Cash price is at 72.75 (+0.14), while open interest for CLH25 is at 311,871. CLH25 settled below its 5 day (73.18), below its 20 day (74.77), above its 50 day (71.36), above its 100 day (70.18), above its 200 day (72.10) and below its year-to date (74.66) moving averages. The COT report (Futures and Options Summary) as of 1/21/25 showed commercials with a net short position of -339,516 (an increase in short positions by -7,065 from the previous week) and non-commercials who are net long +321,973 (a decrease in long positions by -1,156 from the previous week).
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On Thursday, President Trump told reporters that the tariffs on Canada could potentially exclude petroleum products, though he has not yet made a final decision. Trump said “Oil is going to have nothing to do with it as far as I’m concerned,” and “We’re going to make that determination probably tonight on oil. Because they send us oil, we’ll see – it depends on what their price is.” The White House confirmed today that starting this Saturday, February 1st, a 25% tariff will be imposed on goods from Mexico and Canada, while a 10% tariff will be applied to imports from China.The White House confirmed today that 25% tariffs would be placed on goods from Mexico and Canada, while a 10% tariff would be put on China beginning this Saturday, February 1st. On Monday, President Trump floated the idea of universal 2.5% tariffs, while it was reported by the Financial Times that new Treasury Secretary Scott Bessent also favors a 2.5% universal tariff that gradually increases over time, potentially upwards of 20%, citing four unnamed sources familiar with the plan. As expected the Fed unanimously voted to leave interest rates unchanged, although they said that “inflation remains somewhat elevated. The Fed will meet next March 19th. The S&P, Dow Jones and Nasdaq indexes all closed lower while the U.S. Dollar Index closed higher by +0.65%.
Today’s Baker Hughes U.S. oil rig count showed domestic rigs increased by 7, to a total of 479, year-over-year rigs are down 20.
This week’s EIA report showed U.S. commercial crude oil inventories increasing by +3.46 million barrels, above forecasts of a +3.2 million barrel build, bringing inventories to a total of 415.1 million barrels. Crude oil refinery inputs averaged 15.2 million barrels per day, lower than the previous week’s report by 330,000 barrels per day. Refineries operated at 83.5% capacity, lower than the previous week’s 85.9% capacity. U.S. oil imports decreased by -297,000 barrels per day compared to last week’s report, to a total of 6.448 million barrels per day. U.S. oil exports averaged 3.686 million barrels per day. The EIA showed a draw of 326,000 barrels from the Cushing, Oklahoma Hub. Yesterday’s American Petroleum Institute weekly report showed a crude inventory build of +2.86 million barrels. The Cushing, Oklahoma hub had a draw of -144,000 thousand barrels. U.S. production was down 237,000 barrels per day. U.S. crude oil inventories are about 6% below the five-year seasonal average. This was the first week of inventory builds for crude oil seen in the API and EIA weekly reports following nine consecutive weeks of inventory draws.
This morning Ukraine attacked a Russian oil refinery in the Volgograd region, the Russian regional Governor later confirmed that the fire had been extinguished. Earlier in the week Ukraine’s Military said Russian oil refineries in the Nizhny Novgorod region were targeted by drones. The targeted Lukoil’s Norsi oil refinery is Russia’s fourth largest in the country, processing 340,000 barrels of crude per day. This comes after Ukraine targeted the Ryazan refinery last Friday and Sunday, and according to sources, shut down operations due to the attacks. Russian newspaper Kommersant reported that Russian crude oil exports dipped by 2.2%, exporting a total of 295.12 million tons in 2024, citing an unnamed source with knowledge of Russia’s export data. Reuters has reported that the U.S. sanctions placed on January 10th on Russia’s shadow fleet have driven India and China to seek out non-sanctioned Russian tankers, which has begun to drive premiums and supply disruptions in the Asian market.
In the Middle East, two ports in Libya were briefly halted due to protests on Tuesday, the ports export roughly 450,000 barrels per day combined. Libya’s National Oil Company has said protests have halted and operations are back under control. Israel and Lebanon have extended their ceasefire to February 18th. In Gaza, Palestinians have begun returning to northern parts of the strip. There is some ongoing shakiness over Israel breaking the terms of the ceasefire agreements in both Lebanon and Gaza over the weekend and the first half of this week. President Netanyahu is expected to meet President Trump in Washington next Tuesday.
Leaders from OPEC+ will meet next Monday. So far the cartel has made no comments regarding President Trump’s plea for the group to help lower oil prices.
According to China’s National Bureau of Statistics, China’s manufacturing activity in January fell short of economists’ expectations, with the Manufacturing PMI dropping to 49.1 from 50.1 in December. This was below the Reuters forecast of 50.1 for January and marked the weakest manufacturing data since August 2024. China’s financial markets will be closed for the weeklong Lunar New Year celebration, which will last through next Wednesday.
Price Thoughts – March contract traded choppy today, trading positive, then negative, then positive, then nearing session’s end turning negative again. This afternoon Reuters put out a false story that tariffs wouldn’t be put on until March 1st, until the White House came on and said that in fact tariffs would be put on tomorrow, including 10% on China, which helped fuel the whipsaw. Our 200 day moving average is the current support near $72, how traders digest the news over the weekend I have no opinion on, I’m in wait and see mode because I can’t predict at the moment what Trump will want to do with Canadian oil, however, I lean that he will exclude them from tariffs, as he will look to keep gas prices lower at U.S. pumps. So whether that support gets broken through on Monday we’ll just have to wait and see. To the upside there’s resistance near the upper $79.50 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 we have support near the 200 day MA, $70 offers further support and below that $65 is a major support figure.
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