Written Commentary
The Ghost in the Machine Q4 2025
December 22, 2025
CRUDE OIL
February Crude Oil fell sharply early Wednesday after President Trump announced on Tuesday that Venezuela would be “turning over” between 30 million and 50 million barrels of sanctioned oil to the US, but the market bounced off its early lows on skepticism that the amounts would be that large. Prices continue to chop around on uncertainty over how the situation in Venezuela will end up. Apparently the deal the President announced could initially require cargoes that were bound for China to be rerouted, sources told Reuters. China denounced the move. It was not immediately clear if Venezuela would have any access to monies from the transfer, as the Venezuelan state oil firm PDVSA has been sanctioned by the US and its bank accounts are frozen. The increased supply of Venezuelan oil could discourage expansion in US crude production but benefit US refining. The stability of the Venezuelan state is another concern.
PRODUCTS
February RBOB was higher early Wednesday after holding above Monday’s eight-month lows on an early break. The API report came in bearish against expectations for gasoline and diesel, but the market has other things to focus on. February ULSD made a new low for the move early Wednesday, as the warm weather in the US adds to a poor demand bias.
NATURAL GAS
Natural Gas was higher early Wednesday after falling to a new low for the move on Tuesday. The nearby contract has fallen to its lowest level since late October. Mild weather in the US presents a bearish supply outlook that is hard to shake. The latest 6-10-day forecast calls for above normal weather across most of the lower 48 states including all the prime heating demand areas of the north. Much above normal temps in are expected in the northern Plains, expanding outward from there. Only the deep south and the southern tip of Texas are expected to see below normal temps.
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