Energy Prospectus

Oil Traders Turn Bullish for 2025
By Irina Slav - Jan 08, 2025, 6:00 PM CST
Crude oil traders have shifted from net short to net long positions in oil and fuel futures.
Trump’s potential re-enforcement of sanctions on Iran could reduce Iranian oil exports, particularly to China.
Additional factors such as slowing oil production growth in the Permian Basin, China’s stabilizing demand, and OPEC+ production cuts are reinforcing bullish sentiment in the oil market.

Read more: https://oilprice.com/Energy/Crude-Oil/Oil-Traders-Turn-Bullish-for-2025.html

Irina Slav is super sharp and one of the best people that write for OilPrice.com

Bloomberg reported this week that long-only oil positions among funds had gone up by a sizable 41% in just the past three weeks, with short bets down by a third, according to data from the Commodity Futures Trading Commission. The publication attributed the trend to algorithmic traders relying on so-called technical indicators, which appear to be pointing due bulls. At the same time, fundamentals are also supportive of higher oil prices.

The most recent fundamentals data is adding further support to the bullish mood. OPEC+ production data for December this week showed that the total for OPEC was down overall last month, and Russia’s daily average had dipped below the level it had agreed with OPEC as part of their supply control deal.

There are still analysts insisting on oversupply preventing oil from breaking out this year, and this is unlikely to change, at least until oil does break out if it does. With Trump in the White House, talking about using military force to restore U.S. control over the Panama Canal and acquire such control over Greenland, a breakout seems a definite possibility.
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Bottomline: I am gaining more confidence in my 2025 forecast models. I do believe that we will seek WTI over $80/bbl within six months and the natural gas NYMEX futures contracts are already above my forecast of $4.00/MMBtu NGas in Q4 2025.