The March WTI (CLH25) trading session settled at 72.70 (-0.46) [-0.63%], a high of 73.35, a low of 70.67. Cash price is at 73.17 (+0.68), while open interest for CLH25 is at 292,177. CLH25 settled below its 5 day (72.73), below its 20 day (74.70), above its 50 day (71.51), above its 100 day (70.33), above its 200 day (72.05) and below its year-to date (74.46) moving averages. The COT report (Futures and Options Summary) as of 1/31/25 showed commercials with a net short position of -307,656 (a decrease in short positions by +31,860 from the previous week) and non-commercials who are net long +281,209 (a decrease in long positions by -40,764 from the previous week).

If you would like to receive more information on the commodity markets, please use the link to join our email list Sign Up Now

China’s Finance Minister said this morning that the county will impose tariffs of 15% on coal and LNG imports, as well as levying 10% higher duties on crude oil from the United States, starting February 10th. According to EIA data, the U.S. sent China 195,000 barrels per day in November 2024. Despite yesterday's promotion from the Trump Administration that a call would take place between China’s Xi and President Trump today, President Trump and Chinese President Xi Jinping will not speak today, according to a U.S. official who spoke with the Wall Street Journal. Trump was later quoted today as saying “I will speak to Xi at the appropriate time, I’m in no rush”. On Saturday, President Trump imposed 10% tariffs on Chinese goods, which took effect this morning. Yesterday, Caixin, a privately held Beijing based business and investigative journalist media group, released their January Manufacturing PMI survey for China yesterday, which showed the index contracting from December’s 50.5, to January’s 50.1, the figure came in below the Reuters forecast of 50.5. 

President Trump vowed to reapply his “Maximum Pressure” policies on Iran, directing his Treasury and State Department towards “driving Iran’s oil exports to zero.” During Trump's first term his administration brought down Iranian crude oil exports to under 500,000 barrels per day. According to the EIA, Iran, the fourth-largest crude oil producer in OPEC+, accounts for about 3% of daily global output. Its oil exports generated $53 billion in 2023, with around 1.7 million barrels exported per day in 2024. Iran is also one of the top suppliers of crude oil to China, with China being its main source for exports.

Today’s American Petroleum Institute weekly report showed a U.S. crude stock build of +5.025 million barrels, against a forecast of a +3.170 million barrel build. The Cushing, Oklahoma hub had a build of +110,000 barrels. This is the second consecutive week of inventory expansion reported by the API, following the prior week's +2.86 million barrel build. 

Yesterday after speaking with President Trump by phone, Prime Minister Trudeau posted on his X account, saying, 'I just had a good call with President Trump,' and 'Proposed tariffs will be paused for at least 30 days while we work together.' Previously on Saturday, Canada’s Prime Minister announced that there would be 25% retaliatory tariffs on $155 billion worth of U.S. goods; it will now have to wait and be seen if these tariffs are put on a month from now. Canada accounts for more than half of America's total petroleum imports annually, while it represents about 8% of America's yearly petroleum exports, according to USAfacts.org. Last Friday’s Baker Hughes rig count report showed Canada’s oil rig count up by 12, to a total of 186. 

Like Canada, Mexico and the Trump Administration were able to work out a deal that would see Mexico immediately deploy 10,000 Mexican soldiers to the Mexico-U.S. border while America would delay the 25% tariffs on Mexican goods until March 1st. And like President Trudeau, Mexico’s President Claudia Sheinbaum vowed to put on retaliatory tariffs on the United States if Trump decides to impose tariffs, although details on these retaliatory tariffs have been sparse. Per USAfacts.org, Mexico accounts for about 11% of America's total petroleum exports and  11% of the United States' total crude oil imports.

U.S. Factory orders declined by 0.9% in December, the Commerce Department’s Census Bureau said today. After 26 consecutive months of contraction, the U.S. ISM Manufacturing PMI expanded in January. January’s  ISM Manufacturing PMI hit 50.9, beating forecasts of 49.5, and grew from Decembers 49.2. Energy Secretary nominee Chris Wright, the CEO of Denver based oil company Liberty Energy, was confirmed by the Senate yesterday. An updated weather forecast for February has issued an Arctic Blast warning for much of the Midwest and Northeast USA for this week and next. The S&P, Dow Jones and Nasdaq indexes all closed higher while the U.S. Dollar Index closed lower by -0.90%.

Yesterday leaders from OPEC+ gathered at the Joint Ministerial Monitoring Committee, where the cartel said it has not changed its decision to begin gradually unwinding 2.2 million barrels per day of voluntary production cuts until April. 

Russia’s Deputy Prime Minister Alexander Novak said that Russia will increase its oil production in April, saying Russia expects to see an increase of +1.4 million barrels per day in 2025. 

Vitol, the largest independent energy commodities trading company in the world, said in their new forecast that they expect global demand for crude oil to stay steady until at least 2040, with global demand to peak at ~110 million barrels per day near the end of this decade. 

Price Thoughts - March crude sank well below the 200-day moving average pre-open, trading all the way into the $70 handle, fueled off the delayed North American tariffs and weak U.S. factory data released this morning, in my view. Crude rallied back and parsed losses after Trump spoke on reapplying his maximum pressure campaign on Iran, China’s finance ministry applying tariffs on U.S. crude exports. Late in the session the API showed a larger than expected build in American stocks, in my view. March futures prices are nearly flat so far for 2025, wiping out the mid-January price gains. Beginning to see some acceleration in contracts exiting from March into further out months. In my opinion,  we saw buyers enter when prices hit below the 50 and 200 day moving averages. Our 200 day moving average is the current support near $72.05. To the downside we have support near the 200 day MA which is close to  $70,with a round figure like that giving support off that fact alone, and below that $65 is a major support figure. To the upside there’s resistance near the upper $79.50 region, beyond that there’s a chance, in my opinion, we could make a run towards the upper resistance point of ~$85, but a round figure like $80 could be enough of  mental resistance of its own. 

If you would like to receive more information on the commodity markets, please use the link to join our email list Sign Up Now

You can reach me at - JRinaudo@walshtrading.com

Follow Walsh Trading on X - @Walsh_trading

Jim Rinaudo

312-957-4731

Walsh Trading

311 S Wacker Suite 540

Chicago, IL 60606

www.walshtrading.com

Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.

Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices.PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.