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- WTI December 2025 December 2026 Spread
Overview
On July 21, we noted how the December 2025 December 2026 spread had been trading in a range. But, we lastly noted at that time in our analysis, that the daily spread chart showed the bollinger bands tightening, which we thus said at that time :" suggests that the spread is about to see a move out of the recent range. The tightening though does not give an indication as to which way the spread may move."
The spread did move out of the range, and leaped to the upside in tandem with the flat price. In our July 21 email, we pegged resistance on the upside at $2.07/$2.08 and then we cited "strong resistance" at $2.63. The high for the spread 2 days ago was $2.68.
Over the past 3 hours today, the spread has retreated by over 50 cents, confirming for us that the high for the spread currently has been established. This is confirmed by the momentum for the spread having turned negative, basis the daily chart.
The factors likely working against the front end of this spread, thus suggesting further downside, are (1) the tariffs being implemented by the US, which are seen as hampering industrial activity. (2) OPEC+ being set to add further supply this weekend at their meeting. They are seen increasing output by 548 MBPD as of September. (3) the weak US jobs report today suggests that the US may already be seeing some economic slowdown. (4) this week's DOE data saw crude oil exports from the US fall by 1.16 MMBPD. A failure to see those exports rise in the coming weeks will cast a negative pall on the spread.
One factor in favor of the front end that could support the December 2025 in this spread is the possibility for US sanctions against Russia in the near term if President Putin does not soon agree to a ceasefire in the Ukraine conflict.
Support to the downside for the December 2025 versus the December 2026 lies at $1.90--which has been tested today as the spread low is currently $1.87. Below that we do not see any meaningful support until $1.15.
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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.
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