February WTI crude oil (CLG26) today is up +0.88 (+1.54%), and February RBOB gasoline (RBG26) is up +0.0192 (+1.13%).
Crude oil and gasoline prices recovered from early losses today and are sharply higher after OPEC+ on Sunday stuck with its plans to pause an increase in the group’s oil production in Q1. Also, rising geopolitical risks in Russia, the Middle East, Nigeria, and Venezuela are supporting crude prices. Crude prices added to their gains today after the dollar index (DXY00) fell from a 3-week high and turned lower. Also, today’s sharp rally in stocks boosts confidence in the economic outlook that is supportive of energy demand and crude prices.
Vortexa reported today that crude oil stored on tankers that have been stationary for at least 7 days fell -3.4% w/w to 119.35 million bbl in the week ended January 2.
Strength in Chinese crude demand is supportive for prices. According to Kpler data, China’s crude imports in December are set to increase by 10% m/m to a record 12.2 million bpd as it rebuilds its crude inventories.
Crude garnered support today after OPEC+ on Sunday said it would stick to its plan to pause production increases in Q1 of 2026. OPEC+ at its November 2 meeting announced that members would raise production by +137,000 bpd in December but will then pause the production hikes in Q1-2026 due to the emerging global oil surplus. The IEA in mid-October forecasted a record global oil surplus of 4.0 million bpd for 2026. OPEC+ is trying to restore all of the 2.2 million bpd production cut it made in early 2024, but still has another 1.2 million bpd of production left to restore. OPEC’s November crude production fell by -10,000 bpd to 29.09 million bpd.
Ukrainian drone and missile attacks have targeted at least 28 Russian refineries over the past four months, limiting Russia’s crude oil export capabilities and reducing global oil supplies. Also, since the end of November, Ukraine has ramped up attacks on Russian tankers, with at least six tankers attacked by drones and missiles in the Baltic Sea. In addition, new US and EU sanctions on Russian oil companies, infrastructure, and tankers have curbed Russian oil exports.
