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- WTI December 2025 December 2026 spread
Overview
The WTI December 2025 / December 2026 spread rallied yesterday--settling up 87 cents on the day.
The delay in the restart of the Iraqi Kurdish crude exports was seen as supportive for the crude oil flat price and forward curve Wednesday, although today news reports have the supply of 230 MBPD through the Turkish pipeline returning, as a deal has been reached for the restart of the export flow. (Reuters) Worries over Russian supplies of oil and fuel oil products have supported prices this week. Among the concerns are a more hawkish stance by President Trump in his remarks to the U.N. on Tuesday. President Trump said on Tuesday that NATO nations should shoot down Russian aircraft that violate their airspace, raising the specter of supply disruption and lifting the black gold. (FXStreet)
Additionally, fears have become greater that Ukrainian strikes on Russian energy facilities might threaten supply. In recent weeks, Ukraine has intensified drone attacks against Russian energy facilities, including refineries and export hubs, in an attempt to curb Moscow’s export revenues. (FXStreet) Today, the Caspian Pipeline Consortium terminal and the Sheskharis facility on Russia’s Black Sea coast, halted loading of tankers after overnight warnings of drone attacks, Bloomberg reports.
But, supply will likely increase in a week's time as OPEC+ production is set to rise by 137 MBPD as of October 1 as per their most recent agreement. Analysts warn that seasonal demand softening, plus OPEC+ production and Kurdish oil exports resuming, could tip the balance to oversupply. (FX leaders) Also, to us, the DOE data seen Wednesday was not supportive for the WTI as net crude imports rose by 1.596 MMBPD, with exports falling by 793 MBPD and imports rising by 803 MBPD, thus negatively impacting supply.
Also, concerns have risen regarding demand with jet fuel consumption possibly stalling as J.P. Morgan data showed U.S. air passenger traffic in September rose just 0.2% year on year, a big slowdown from earlier months. With driving season in the U.S. having ended, gasoline demand is also seen weakening.
Technically, the Dec 2025 Dec 2026 spread has 2 items that we see technically as likely stalling the upward bias for the spread. Firstly, the spread has a mean reversion setup, with Wednesday's settlement being over the upper bollinger band. That band lies today at $1.74. The settlement for the spread yesterday was $1.94. Also casting a slight negative impact on the spread is the momentum for the spread basis the daily chart that looks to be cresting, and looks poised to turn downward.
We see resistance for the spread at the Wednesday high at $1.97/$1.98. Above that, the next resistance lies at $2.58/$2.64. Support to the downside is seen at $1.00/$1.02 and then at $.053/$0.57.
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