Special Report: WTI December 205 December 2026

Overview

On June 10, before the Israeli/Iran conflict began, we suggested that the December 2025 December 2026 WTI spread had topped out at +20 cents. That suggestion was wrong as the spread went up considerably along with the flat price due to the worries over supply disruptions in the Mideast due to the conflict.
After the U.S. strikes against the Iranian nuclear facilities and the ceasefire between Israel and Iran, the flat price for spot WTI futures and the December 2025  December 2026 WTI spread have reverted back to the price levels that existed back on June 10. 

Today, news was seen that showed that VLCC rates for Gulf-to-China routes have dropped to approximately $63,000 per day, down from nearly $100,000 just two weeks ago. The fall reflected improved vessel availability and a partial unwinding of war-risk premiums, which had surged during the height of the Iran-Israel-US showdown. AIS data shows a return to normal operating patterns near Hormuz, with fewer tankers loitering off Oman or taking evasive routes. But, insurers have not removed war-risk surcharges entirely.  (Oil Price)
The above news underscores a return to near normal market operations in the crude oil sphere. This reduces the need for a premium for the flat price and or spreads.

Additionally the prospect for OPEC+ to raise production at its July 6th meeting should ease upside pressure for the flat price and or spreads for crude oil.

On the flip side, resolution of tariff issues will hopefully allow for demand to remain at acceptable levels, thus limiting some of the downside price action that was seen in late May/early June as demand fears due to tariffs being imposed weighed on energy prices. 

Technically the December 2025 December 2026 WTI spread has negative momentum. The spread having reverted back to trading at prices from early June suggests that there is upside resistance for the December 2025 versus the December 2026 WTI at +$0.77/+$0.80 and then at +$1.09/+$1.15. Support for the December 2025 versus the December 2026 lies at -$0.73/-$0.76 and then at the lows at -$1.27/-$1.29 cited in our June 2nd post.

Enjoyed this article?

Subscribe to never miss an issue. Daily updates provide a comprehensive analysis of both the fundamentals and technical factors driving energy markets.

Click below to view our other newsletters on our website:

Ethanol Update 

Natural Gas Update

Fuel and Freight Daily Report

Disclaimer

This article and its contents are provided for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any commodity, futures contract, option contract, or other transaction. Although any statements of fact have been obtained from and are based on sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed.

Commodity trading involves risks, and you should fully understand those risks prior to trading. Liquidity Energy LLC and its affiliates assume no liability for the use of any information contained herein. Neither the information nor any opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any opinions expressed herein are subject to change without notice, are that of the individual, and not necessarily the opinion of Liquidity Energy LLC