Oil is trading like a headline asset again—yet the weekly data keeps tugging it back toward fundamentals. Axel Fabela Iturbe’s framework for late-January is simple: the market is trying to price two stories at once. One is geopolitical optionality (Iran and shipping risk), the other is a winter macro tape where inventories, refinery runs, and products supplied can quickly erase—or validate—risk premium.
The tape in two sessions
The last two trading days captured the market’s mood swings.
- On January 22, crude slid roughly 2% as rhetoric around Greenland and Iran softened and the market briefly leaned into the idea that Russia-Ukraine diplomacy could eventually translate into more supply. Brent fell to about $64.06 and WTI to about $59.36.
- On January 23, prices rebounded after fresh comments renewed attention on Iran-related disruption risk. Brent was around $64.41 and WTI around $59.69 in early trade.
Iturbe’s takeaway: a mid-$60s Brent and sub-$60 WTI backdrop suggests the market is not panicking—but it is paying for optionality when the headlines sharpen.
The catalyst stack Iturbe is using
Instead of forcing a single narrative, Iturbe groups drivers into a stack, then asks which layer is controlling the price that week.
Layer 1: Geopolitics sets the “insurance premium”
Iran is the obvious flashpoint. The January 23 bounce was tied to renewed Iran-related concerns after U.S. comments about forces moving toward the region.
When that premium gets repriced, intraday moves can overwhelm all the usual supply/demand math—at least temporarily.
Layer 2: “Sanctions relief” and incremental barrels
On the down day, prices were also pressured by a broader de-escalation tone and by optimism around Russia-Ukraine diplomacy, which markets often translate into hypothetical future supply flexibility.
Iturbe treats this as a slow-burn factor: it doesn’t add barrels tomorrow, but it can cap rallies if traders believe more supply could show up later.
Layer 3: OPEC+ constrains the baseline
A crucial stabilizer is the producer policy backdrop. OPEC+ participants reaffirmed a pause to production increments in February and March 2026, citing seasonality.
In Iturbe’s map, that doesn’t guarantee higher prices; it simply reduces one downside tail: the “surprise supply wave” risk in early Q1.
Layer 4: U.S. inventory data keeps the market honest
The U.S. inventory picture has been the counterweight to geopolitics. Reuters highlighted a larger-than-expected crude inventory build of 3.6 million barrels for the week ending January 16, a data point the market took as bearish.
The EIA’s Weekly Petroleum Status Report summary confirms that commercial crude stocks rose by 3.6 million barrels to 426.0 million (excluding SPR), and notes inventories were about 2% below the five-year average for this time of year.
The “barrel math” that matters more than opinions
Iturbe’s preferred way to keep analysis grounded is to run through a short scoreboard: stocks, runs, and implied demand.
From the EIA weekly summary for the week ending January 16, 2026:
- Crude inventories (ex-SPR): 426.0M (+3.6M w/w)
- Gasoline inventories: +6.0M w/w, about 5% above the five-year average
- Distillate inventories: +3.3M w/w, about 1% below the five-year average
- Refinery inputs: ~16.6M bpd, utilization around 93.3%
- Total products supplied (4-week avg): ~19.9M bpd, about 1.5% above the same period last year
The nuance in those bullets is why Iturbe avoids “all-in” conclusions. A crude build can be bearish, but strong refinery utilization and products supplied can signal that demand isn’t collapsing—while a large gasoline stock build can still weigh on near-term sentiment.
Why shipping is a quiet accelerator
Iturbe also keeps a close eye on “barrels on water,” because logistics can turn an otherwise balanced market into a local squeeze.
Recent research and reporting point to tanker dynamics staying tight into 2026, with sanctions and fleet constraints cited as structural supports for higher freight.
Fitch noted this week that potential Venezuelan crude redirection could push already-high tanker rates higher in the near term.
Iturbe’s trading inference: if the market starts paying up for freight and longer routes, headline-driven rallies can become more “sticky” because prompt barrels become harder to arbitrage quickly.
A practical way to frame the next few weeks
Rather than publishing a single-point forecast, Iturbe frames the oil market with three conditional lanes:
- Range lane (base case): geopolitics produces short spikes, but weekly data (inventories/runs) drags price back toward balance. The last two sessions fit this behavior.
- Risk-premium lane: a clear escalation around Iran or disruptions to flows forces the market to buy protection quickly, lifting Brent even if U.S. stocks build.
- Supply-relief lane: diplomacy narratives around Russia/Ukraine or other supply additions gain credibility, keeping rallies capped and pulling the curve toward softer pricing.
The near-term calendar traders actually care about
For fundamentals-driven catalysts, Iturbe highlights one date: the EIA’s next weekly petroleum report release on January 28, 2026.
In his framework, the “tell” won’t be crude alone—it’s the combination of crude, gasoline, distillates, and refinery utilization that determines whether the market treats geopolitical strength as durable or disposable.
Bottom line
The oil market is oscillating between insurance pricing (geopolitics) and inventory math (EIA). With OPEC+ holding the early-quarter line on supply increments, the near-term burden shifts to U.S. data and the frequency of shock headlines.
In this environment, Iturbe’s stance is less about calling direction and more about respecting regime: when headlines can move crude 2% one day and reverse the next, the edge often comes from staying anchored to the weekly scoreboard—and sizing exposure so a single geopolitical headline doesn’t do the risk management for you.
