The April WTI (CLJ25) trading session settled at 70.40 (-2.08) [-2.87%], a high of 72,77, a low of 70.17. Cash price is at 72.57 (+0.34), while open interest for CLJ25 is at 312,935. CLJ25 settled below its 5 day (71.47), below its 20 day (71.85), below its 50 day (71.81), below its 100 day (70.42), below its 200 day (71.45) and below its year-to date (72.90) moving averages. The COT report (Futures and Options Summary) as of 2/21/25 showed commercials with a net short position of -239,074 (a decrease in short positions by +18,438 from the previous week) and non-commercials who are net long +218,801 (a decrease in long positions by -14,407 from the previous week).
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Sources told Reuters that President Trump’s Administration is pushing for Iraq to allow Kurdish oil exports to restart, or face sanctions alongside Iran. On Monday Iraq’s Oil Minister Abdel-Ghani said that Kurdish oil exports were expected to resume in the coming weeks. The pipeline which passes through Iraq, Turkey, the semi-autonomous Kurdish region and into Chechnya has been halted over the last two years. Previously the pipeline handled about 450,000 barrels per day. According to Iraq’s Abdel-Ghani, he expects about 300,000 b/d to flow through the region upon restart.
In an interview with Bloomberg Television yesterday, U.S. Treasury Secretary Scott Bessent said the U.S. would consider easing Russian sanctions if Moscow agreed to further peace talks. Today Bessent met with his Chinese counterpart virtually, where it is being said he raised mutual concerns over trade and economic tensions while urging China to rebalance its economy towards increased consumer spending.
Today’s Baker Hughes oil rig count showed oil rigs increased by +7, from 481 to 488.
Yesterday’s Energy Information Administration petroleum data for the week ending February 14th 2025 show U.S. commercial crude oil inventories increased by +4.6 million barrels from the previous week (against a forecast of +3.2 million barrels), to a total of 432.5 million barrels, which is about 3% below its five-year seasonal average. U.S. crude oil imports averaged 5.8 million barrels per day, lower than the previous week by 488,000 b/d. U.S. oil refinery inputs averaged 15.4 million barrels per day, while operating at 84.9% capacity. The Strategic Petroleum Reserve, which is currently filled to multi-decade lows, remained unchanged at 395.3 million barrels. This is the fourth consecutive week of inventory builds reported by the EIA. This week’s the American Petroleum Institute estimated 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.
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%-40% and take up to two months to get completely back online. However Oilprice reported, citing sources who have seen official data, that Kazakhstan’s oil output has hit a record high despite the disruption.
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.
President Trump announced on Wednesday that his administration plans to replenish America’s Strategic Petroleum Reserve, which has dropped to multi-decade lows and is now approximately 250 million barrels below its level from four years ago.
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. The worst of this cold blast is expected to end overnight, according to Fox Weather.
The S&P, Dow Jones and Nasdaq indexes all finished lower, with their largest daily decline of 2025, while the U.S. Dollar Index closed higher by +0.25%. The Headline S&P Global US PMI Composite Output Index declined to 50.4 in February from January’s 52.7 (17-month low), while the US Manufacturing Output Index rose to 53.8 in February from January’s 51.8 (11-month high), according to preliminary ‘flash’ reading. China’s Shanghai 300 Index had a notable +1.26% gain.
Price Thoughts – The largest single day decline for crude oil that has happened in week’s, I think this was a combination of the larger than expected inventory build (another week of builds and outbuilding its forecast), increased rig count, the potentially very large 300,000-500,000 b/d that may come back online via this Turkey-Kurd-Iraq pipeline. That and the market had run up towards its $73 resistance. Some speculated that there was a wave of panic that may have been sparked after Daily Mail, Economic Times and Zerohedge reported that there’s a new strain of a covid-like respiratory illness spreading in Wuhan, China. I felt like this didn’t deserve to be posted above because at the moment it seems like a tabloid story, in my opinion. I will obviously keep readers updated if this has legs to it. Again the ceasefire between Israel and Hamas is on shakier ground, the end of the first phase of the current ceasefire agreement will end Saturday after the scheduled return of 6 more Israeli hostages.
We did settle and break through below our 5-20-50-100-200 day moving averages. Next Monday will be an important gauge whether we have a run down towards $67 or continue to hold steady between 70-73.There has been support near $70 (which held again to end this week), 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. All in all, volatility and headline driven trade I don’t see ending anytime soon.
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