March WTI crude oil (CLH26) today is up +0.13 (+0.22%), and March RBOB gasoline (RBH26) is up +0.0228 (+1.23%).

Crude oil and gasoline prices are moving higher today, with gasoline climbing to a 7-week high.  Crude is finding support today from a weaker dollar and the IEA's decision to cut its global crude surplus estimate for this year.  Also, President Trump is still looking at possible military actions against Iran, which could disrupt Middle East crude supplies.

Crude found support today on a report from the Wall Street Journal that said President Trump is pressing aides for "decisive" military options against Iran, as the country tightens controls and targets protesters.  The US is sending an aircraft strike force to the Middle East, which may be the start of a broader buildup in the region should President Trump decide to attack Iran.

Unrest in Iran, OPEC's fourth-largest producer, is also underpinning crude prices as Iranian security forces have killed thousands of protesters, and President Trump threatened attacks on Iran if the killing of protesters continues.  Reuters reported last Wednesday that some US personnel have been advised to leave the US Al Udeid Air base in Qatar.  The facility was targeted by Iran in retaliatory airstrikes last year after the US attacked Iran's nuclear facilities.  Iran, OPEC's fourth-largest producer, produces more than 3 million bpd, and its crude production could be disrupted if the protests against the government worsen and the US decides to strike government targets.  

Crude oil has carryover support from Tuesday, when Reuters reported that Kazakhstan's Tengiz and Korolev oil fields would be shuttered for another 10 days due to power generator fires.  Kazakhstan has curbed some 900,000 bpd of crude production that feeds the Caspian Pipeline Consortium terminal on Russia's Black Sea Coast due to drone strikes.

The IEA today cut its 2026 global crude surplus estimate to 3.7 million bpd from last month's estimate of 3.815 million bpd.  Last Tuesday, the EIA raised its 2026 US crude production estimate to 13.59 million bpd from 13.53 million bpd last month, and cut its US 2026 energy consumption estimate to 95.37 (quadrillion btu) from 95.68 last month.

Vortexa reported Monday that crude oil stored on tankers that have been stationary for at least 7 days fell -8.6% w/w to 115.18 million bbl in the week ended January 16.

Strength in Chinese crude demand is supportive for prices.  According to Kpler data, China's crude imports in December are set to increase by 10% m/m to a record 12.2 million bpd as it rebuilds its crude inventories.

Crude garnered support after OPEC+ on January 3 said it would stick to its plan to pause production increases in Q1 of 2026.  OPEC+ at its November 2025 meeting announced that members would raise production by +137,000 bpd in December, but will then pause the production hikes in Q1-2026 due to the emerging global oil surplus.  OPEC+ is trying to restore all of the 2.2 million bpd production cut it made in early 2024, but still has another 1.2 million bpd of production left to restore.  OPEC's December crude production rose by +40,000 bpd to 29.03 million bpd.

Ukrainian drone and missile attacks have targeted at least 28 Russian refineries over the past five months, limiting Russia's crude oil export capabilities and reducing global oil supplies.  Also, since the end of November, Ukraine has ramped up attacks on Russian tankers, with at least six tankers attacked by drones and missiles in the Baltic Sea.  In addition, new US and EU sanctions on Russian oil companies, infrastructure, and tankers have curbed Russian oil exports.

Last Wednesday's EIA report showed that (1) US crude oil inventories as of January 9 were -3.4% below the seasonal 5-year average, (2) gasoline inventories were +3.4% above the seasonal 5-year average, and (3) distillate inventories were -4.1% below the 5-year seasonal average.  US crude oil production in the week ending January 9 was down -0.4% w/w to 13.753 million bpd, just below the record high of 13.862 million bpd from the week of November 7.

Baker Hughes reported last Friday that the number of active US oil rigs in the week ended January 16 rose by +1 to 410 rigs, just above the 4.25-year low of 406 rigs posted in the week ended December 19.  Over the past 2.5 years, the number of US oil rigs has fallen sharply from the 5.5-year high of 627 rigs reported in December 2022.