Oil Context Weekly (W11)
Oil Context Weekly (W11)
Crude prices rocketed to fresh year-to-date highs on the double whammy of massive Ukrainian drone attacks on Russian refineries and the IEA’s abrupt bullish forecast shift.
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Summary
Flat Prices finally broke out of their persistent range to the upside, with Brent rallying $3/bbl to close the week at a fresh year-to-date high above $85/bbl.
Calendar Spreads briefly followed the flat price rally wider but resumed their now weeks-long weakening trend on Friday; Brent W1 vs. M1 CFDs fell into outright contango for the first time since January, though less volatile measures remain in mild backwardation.
Inventories data was balanced between draws in the US and roughly equivalent builds in Singapore and ARA Europe, continuing a trend in which inventory data is leaning more bullish in the US and looser in the other two hubs.
Refined Products strengthened with gasoline leading the way, rising, more or less, to exceed diesel prices for the first time since the end of the 2023 driving season and two weeks earlier than last year.
Investor Positioning data revealed that speculators were net sellers over the week leading up to Wednesday’s rally, though the pace of flat price gains in the context of weakening physical market indicators makes it highly likely that this rally was materially assisted with further speculative inflows.
As Well As Ukraine’s intensifying attacks against Russia’s refining fleet, the IEA’s recent bullish forecast shift on OPEC+ cut extensions, and how to think about how OPEC+ thinks about starting to ease its production cuts.