Recap: The oil market on Friday posted an outside trading session with thin volume trading following the Christmas Day holiday. The market weighed potential supply risks after the U.S. carried out airstrikes against Islamic State militants in Nigeria and put further economic pressure on Venezuela, while traders also watched further developments in the Russia-Ukraine peace process. U.S. President Donald Trump said the U.S. on Thursday carried out a strike against Islamic State militants in northwest Nigeria’s Sokoto state in coordination with the Nigerian government. The strike did not impact any crude pipelines or oil terminals. Also, the U.S. seems to be using economic pressure rather than military means to pressure Venezuela as it ordered the military to focus on a “quarantine” of Venezuelan oil for at least the next two months. The crude market traded mostly sideways before it traded to a high of $58.88 in early morning trading. However, the market gave up its gains and sold off to a low of $56.65 ahead of the close amid hopes of a peace agreement between Russia and Ukraine. Russia’s President Vladimir Putin said may be open to a territory swap, while Ukraine’s President Volodymyr Zelenskiy is scheduled to meet with President Donald Trump on Sunday in Florida, stating that a lot can be decided before the New Year. The February WTI contract settled down $1.61 at $56.74 and the February Brent contract settled down $1.60 at $60.64. The product markets ended the session lower, with the heating oil market settling down 5.06 cents at $2.1070 and the RB market settling down 5 cents at $1.6971.
Technical Analysis: The crude market will look to the developments on a potential Ukraine peace deal, with President Donald Trump scheduled to meet Ukraine’s President Volodymyr Zelenskiy on Sunday. The market will also look for further developments on the geopolitical tensions between the U.S. and Venezuela. The oil market is seen finding support at $56.65, $56.60, $56.41, $55.61, $55.08 and $54.89. Meanwhile, resistance is seen at $58.88, $58.93, $60.01, $60.12, $60.45 and $60.60.
Fundamental News: According to Axios’ reporter Barak Ravid, U.S. President Donald Trump will meet Ukrainian President Volodymyr Zelenskiy on Sunday at Mar-a-Lago. They are expected to discuss territorial issues. Ukraine’s President has stated that sensitive issues, including any compromises on territory, should be discussed at the level of heads of state, and Kyiv has been seeking a face-to-face meeting with President Trump. He held talks on Thursday with Trump’s special envoy Steve Witkoff and the president’s son-in-law Jared Kushner. He said that some documents, part of a wider framework aimed at ending the conflict and ensuring Ukraine’s reconstruction, were “nearly ready” while others were “fully prepared”.
The Kremlin said Russian President Vladimir Putin’s foreign policy aide spoke to members of the U.S. administration after Moscow received U.S. proposals about a possible Ukrainian peace deal. Kremlin spokesman, Dmitry Peskov, said Kremlin foreign policy aide, Yuri Ushakov, spoke by telephone to several members of the administration of U.S. President Donald Trump. He said Russian President’s envoy Kirill Dmitriev brought paper copies of U.S. proposals for peace back to Moscow after a meeting in Miami last weekend and added that the details were being analyzed by the Kremlin.
The Kommersant newspaper reported Russia’s President Vladimir Putin told some of Russia’s top businessmen that he might be open to swapping some territory controlled by Russian forces in Ukraine but that he wanted all of Donbas. According to Kommersant, Russia’s President also raised the issue of the Zaporizhzhia nuclear power plant at his meeting with businessmen. According to Kommersant, Russia’s President Vladimir Putin said that joint Russian-U.S. management of the nuclear power station was being discussed.
IIR Energy reported that U.S. oil refiners are expected to shut in about 145,000 bpd of capacity in the week ending December 26th, increasing available refining capacity by 41,000 bpd. Offline capacity is expected to increase to 192,000 in the week ending January 2nd.
Early Market Call – as of 8:00 AM EDT
WTI – Feb $58.17, up $1.25
RBOB – Jan $1.7250, up 2.74 cents
HO – Jan $2.1439, up 3.45 cents
