Recap: The oil market sold off on Monday following the news that Iraq restored output at one of its oilfields, while the market also weighed ongoing talks to end the war in Ukraine. The market traded mostly sideways in overnight trading, posting a high of $60.30, in light of the news that Iraq shut down production at Lukoil’s West Qurna 2 field due to a leak on an export pipeline. However, the market sold off and extended its losses to $1.40 as it posted a low of $58.68. The market was pressured by the news that Iraq restored production at the 460,000 bpd Iraqi oilfield. The crude market later settled in a sideways trading range ahead of the close. The January WTI contract settled down $1.20 at $58.88 and the February Brent contract settled down $1.26 at $62.49. The product markets ended the session in negative territory, with the heating oil market settling down 6.47 cents at $2.2982 and the RB market settling down 3.6 cents at $1.7981.
Technical Analysis: The crude market will remain in its sideways trading range as the market will focus on the Federal Reserve meeting, which ends on Wednesday. An interest rate cut is widely expected. However, some analysts believe the Fed’s policy committee could be sharply divided. The market will also look for updates on possible new curbs on Russian oil exports as the Group of Seven countries and the European Union are in talks to replace a price cap on Russian oil exports with a full maritime services ban that would likely further curb supply from Russia. The oil market is seen finding support at $58.68, $58.37, $58.28, $57.66, $57.10, $56.33 and $55.99. Meanwhile, resistance is seen at $60.30, $60.50, $60.70, $60.85, $61.01, $61.18, $61.60 and $61.84.
Fundamental News: Ukrainian President Volodymyr Zelenskiy said unity between Europe, Ukraine and the U.S. was important when negotiating an end to Russia’s war in Ukraine. Ukraine’s President said on Sunday ahead of his planned consultations with European leaders in coming days that talks with U.S. representatives on a peace plan for Ukraine have been constructive but not easy. He held a call on Saturday with U.S. President Donald Trump’s special envoy Steve Witkoff and Trump’s son-in-law Jared Kushner, and is expected to meet French, British and German leaders on Monday in London. Further talks are planned in Brussels.
China’s crude oil imports in November increased 4.88% on the year, with daily import volumes reaching the highest level since August 2023. According to data from the General Administration of Customs, China imported 50.89 million metric tons or 12.38 million bpd of oil in November, up 5.24% on the month. China imported 521.87 million tons of crude oil from January to November, up 3.2% from the same period last year.
Platts reported that India and Russia on Friday pledged to deepen their energy ties following Russian President Vladimir Putin’s two day meeting with Indian Prime Minister Narendra Modi, with Russia ensuring uninterrupted fuel supplies to India, while New Delhi emphasized that ensuring energy security has been a key component of India-Russia bilateral relations. Russia’s President said Russia will continue to develop long-term energy ties with India, despite political hurdles that have hit overall trade turnover in 2025.
IIR Energy said U.S. oil refiners are expected to shut in about 54,000 bpd of capacity in the week ending December 12th, unchanged from the previous week. Offline capacity is expected to remain at 54,000 bpd in the week ending December 19th.
Early Market Call – as of 8:40 AM EDT
WTI – Jan $58.79, down 6 cents
RBOB – Jan $1.7983, up 27 points
HO – Jan $2.2810, down 1.57 cents
