WTI Crude Oil Futures (March) 

Yesterday’s Settlement: 71.37, down -1.95 [-2.66%]

WTI Crude Oil futures moved sharply lower yesterday on three core bearish catalysts including a bearish EIA report, a weak OPEC+ demand projection, and progress on ending the war in Ukraine. 

Tuesday night’s API printed bearish, showing Crude builds of 9mln bbls. Wednesday’s EIA report followed suit and printed fairly bearish figures shown below. It should be noted that product demand continues to outperform, underpinning U.S. crude oil strength and low inventories. EIA figures were as follows [thousand bbls]:

• Crude: +4,070 vs +2,305 estimate
• Gasoline: -3,035 vs +1,210 estimate
• Distillates: 135 vs -2,250 estimate
• Refinery Utilization: +0.50% vs +0.20% estimate

OPEC+ left 2025 and 2026 demand projections unchanged, which should have been expected. The group once again highlighted compliance and their willingness to balance the market despite any outside forces.

Talks of ending the war in Ukraine have made progress. This is a bearish catalyst not worth fighting if it continues to dominate rhetoric. Middle Eastern tensions are continuing to escalate with little to no risk-premia built into the futures contracts. Russian – Ukraine ceasefire rhetoric will outweigh Middle Eastern tensions to favor the bears if progress continues. 

Today, futures are lower by -0.84 [-1.16%] to 70.54

Russian – Ukraine ceasefire talks are progressing this morning as Trump and Putin agreed to talks. Striking a deal on a ceasefire will be a long and arduous task. Ukraine has a foothold on Russian territory while Russia controls Ukrainian territory. Also, Zelinsky has included the re-annexation of Crimea as a prerequisite to a ceasefire deal previously. This is likely a non-starter for Russia.

Coming to a true agreement will be a long and dramatic process. Despite this, markets are beginning to price in the possibility of a deal and ceasefire headlines are increasing. If talks progress through today, it is potentially a bearish catalyst not worth fighting from the bull side. Buying opportunities will present themselves as global inventories remain tight, but a washout in longs is possible.    

Technical Analysis:

With the increasing possibility of a Russian – Ukraine ceasefire, we are shifting our bias back to neutral. March futures are currently sitting at a strong three-star support level of…

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