Crude oil markets saw thin trading activity on Monday due to the early closure of U.S. markets for Martin Luther King Jr. Day. Prices have entered a short-term stalemate between bullish and bearish forces, with volatility noticeably narrowing over the past two trading sessions. Geopolitical uncertainties have kept the market in a cautious stance. On one hand, the U.S. has temporarily paused military action options against Iran, while on the other, it continues to deploy military assets to the Middle East. This has led to only a partial retracement of the geopolitical risk premium in oil prices, as investors remain highly attentive to developments concerning Iran. Since the start of January, market focus has shifted toward geopolitical factors, pushing concerns over supply surplus into the background. Additionally, the U.S. threat to impose more tariffs on European allies opposing the acquisition of Greenland has sparked worries about the economic outlook. Faced with this complex landscape, investors are adopting a patient approach, waiting for greater clarity in the oil market amid these disturbances. Market participants have significantly adjusted their positions over the past three weeks, particularly in Brent crude, which is highly sensitive to geopolitical developments. The latest持仓 data shows that as of the week ending January 13, speculators increased their net long positions by 85,496 contracts to 208,461 contracts. In just three weeks following the outbreak of geopolitical conflict, net long positions have surged by 150,000 contracts. This has shifted the market from a previously clear bearish dominance back to a balanced, stalemate situation. In the short term, oil prices are expected to continue trading in a range-bound manner, with significant uncertainty remaining in the outlook. The potential for sudden, high-volatility price swings persists. At this stage, prioritizing risk management is crucial, followed by identifying potential opportunities. 【1】WTI crude futures, which closed early for Martin Luther King Jr. Day, edged up $0.09, or 0.15%, to settle at $59.43 per barrel. Brent crude futures fell $0.19, or 0.3%, to close at $63.94 per barrel. INE crude futures declined 0.52% to finish at 440.3 yuan. 【2】The U.S. dollar index dropped 0.32% to 99.05. The Hong Kong Exchanges USD/CNY rate fell 0.13% to 6.937. The U.S. 10-year Treasury yield was unchanged at 111.81. The Dow Jones Industrial Average declined 0.17% to close at 49,359.33. 【1】Survey: Russia's Oil and Gas Budget Revenue Expected to Fall 46% in January According to Reuters calculations on Monday, Russia's federal budget revenue from oil and gas taxes is projected to decrease by 46% year-on-year in January, due to lower oil prices and a stronger ruble. Oil and gas revenues account for approximately one-quarter of Russia's federal budget. Revenue for the first month of the year is expected to drop to around 420 billion rubles (approximately $5.41 billion), marking the lowest level since August 2020, when the pandemic caused a sharp decline in global fuel demand. The Russian Ministry of Finance will release official data on oil and gas budget revenue on February 4. 【2】Supply Disruptions Lead to Decline in Azerbaijan's 2025 Crude Exports via BTC Pipeline ⑴ Data shows that Azerbaijan's crude oil exports via the Baku-Tbilisi-Ceyhan (BTC) pipeline fell to 27.18 million metric tons in 2025, a decrease of 7.8% compared to the previous year. ⑵ The decline in exports was primarily due to issues related to contaminated crude oil. ⑶ The BTC pipeline runs through Georgia to Turkey and is used to export crude from oil fields in Azerbaijan operated by BP. ⑷ According to data from Azerbaijan's State Statistical Committee, the country's total crude oil transportation volume in 2025 was 36.3 million tons, with 74.9% of that transported via the BTC pipeline. ⑸ The data also indicated that the volume of transit crude from other countries, such as Kazakhstan and Turkmenistan, shipped via the BTC pipeline fell to 4.12 million tons in 2025, down from 5.3 million tons in 2024. ⑹ This suggests that the stability of regional crude supply and logistics chains faces intermittent challenges, which could exert short-term impacts on the market supply of specific crude grades. 【3】National Bureau of Statistics: Crude Processing Growth Accelerates In December, the volume of crude oil processed by designated large-scale industrial enterprises reached 62.46 million tons, representing a year-on-year increase of 5.0%. This growth rate accelerated by 1.1 percentage points compared to November. The average daily processing volume was 2.015 million tons. For the full January-December period, the cumulative volume of crude oil processed was 737.59 million tons, up 4.1% year-on-year. Crude oil production remained stable. In December, crude oil output from designated large-scale industrial enterprises was 17.8 million tons, a slight decrease of 0.6% compared to the same period last year. The average daily production was 574,000 tons. For the full January-December period, cumulative crude oil production reached 216.05 million tons, an increase of 1.5% year-on-year. Data released by the General Administration of Customs on January 18 showed that China's crude oil imports in December amounted to 55.97 million tons, surging 17.4% year-on-year. Cumulative imports for January-December reached 577.73 million tons, up 4.4% compared to the same period last year. China's imports of refined oil products in December were 3.99 million tons, an increase of 21.1% year-on-year. Cumulative imports for January-December totaled 42.42 million tons, a decrease of 12% year-on-year. China's exports of refined oil products in December were 5.37 million tons, a substantial increase of 43.6% year-on-year. Cumulative exports for January-December reached 58.02 million tons, a slight decrease of 0.2% year-on-year.
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