Expected Refiner Hedging Across the Board
Oil prices wobble as cracks diverge and geopolitics fade, with data pointing to refiner hedging
2 reports
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Crude prices rebounded before Christmas, but thin holiday trading, OPEC uncertainty and oversupply fears kept sentiment cautious.
Published: 6 January 2026
13 page report
In the week ending 23 December, crude prices met significant support levels and climbed w/w. Nevertheless, the week was marked by a quiet atmosphere as the market closed in anticipation of the Christmas and end-of-year holidays.
- Fundamentally, uncertainty regarding OPEC’s strategy amid growing concerns about crude oversupply continued to loom over market sentiment. Further volatility stemmed from tensions between the US and Venezuela. This eventually saw a boiling point into the new year, with the US ordering a military attack in Venezuela and capturing Venezuelan leader Nicolás Maduro and his wife, Cilia Flores, to face drug and weapons charges.
- Returning to the week ending 23 Dec, open interest in Brent and WTI futures) saw a weekly decline. Producers/merchants exited around 2.2% of their overall length in the two benchmark futures, while their short counterparts added to their positions. Speculative players were bullish, adding 5% to their combined length w/w and removing 10.4% from their short positions. We observed this trend reflected individually in both Brent and WTI futures. The decline in OI, led by WTI futures, hints at shorts taking profit at low levels.
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