WTI Crude Oil Futures (February)
ALERT JAN CONTRACT EXPIRY DEC 19th. ROLL TO FEBRUARY ADVISED.
Yesterday’s Settlement: 70.29, down -0.53 [-0.75%]
WTI Crude Oil futures were lower yesterday after weak Chinese economic and crude oil data was reported on Sunday night. The weak data reinforced Chinese demand concerns heading into 2025.
Chinese crude oil refining for November was 58.51mln tonnes [14.3mln bbl/day], the lowest figures since June. Refinery maintenance was cited for the weak figures. Industry consultants are also forecasting weak refining activity in December as cold weather slows construction and economic activity.
China’s overall crude oil demand fell 2.1% YoY in November. Year-to-date oil demand through November is lower by -3.3% YoY to 14mln bbls/day.
Retail sales for China also printed well below expectations Sunday night, rising by +3% YoY vs +5% estimated. Industrial output increased +5.4% YoY, in line with October’s performance. The slowdown in the Chinese consumer is concerning for the “Chinese Recovery” bull thesis.
Other headlines included the heightening of Russian oil sanctions, as the EU sanctioned 52 additional tankers tied to Russian oil shipments yesterday.
Today, futures are lower by -0.70 [-1.00%] to 69.59.
A global risk-off trade this morning is driving crude oil futures lower. The poor Chinese data printed Sunday night is still weighing on the bull thesis as well. The UK followed the EU, and issued fresh sanctions on Russian trading firms and tankers this morning.
Also weighing on futures is news from Kazakhstan, where Prime Minister Olzhas Bektenov ordered the energy ministry to ensure the country’s 2025 production goals are hit in 2025 [97.2mln tonnes vs 87.8mln tonnes in 2024]. Kazakhstan has been one of the problem children within OPEC+, continually pumping above their quota. The PM’s speech and political pressure could strain OPEC+ relations as the country’s goals are far above their OPEC+ allotment.
The macro environment is trading risk-off ahead of the Fed announcement tomorrow. Gold and Silver are sharply lower, U.S. equities are lower, bonds are lower and the dollar is flat. It is a sell-everything type of morning as we head into the U.S. open.
Technical Analysis
WTI Crude Oil futures failed to extend Friday’s gains and are now back in range. Furthermore, price action has surrendered our Pivot and point of balance at 69.98 and are trading into Thursday’s strength. A hold above support detailed in our levels below will help keep the edge with the bulls but the ceiling is well defined at…
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