Oil Context Weekly (W12)
Crude prices end the week flat, pulling back from recent highs as market participants question the staying power of last week’s rally accentuated by the largest weekly hot money inflow since Mar 2023
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Summary
Flat Prices ended flat, around $85.50/bbl Brent, after continuing last week’s momentum through Monday and Tuesday, rising to nearly $88/bbl before reverting back.
Futures Curves largely followed the trajectory of flat prices, with calendar spreads trading wider over the first half of the week and tightening again in the second half; futures curves ended roughly flat vs. last Friday’s close while Brent CFDs and longer-dated spreads ended very slightly tighter, tipping the signal into weak negative territory.
Inventories data was universally bullish as all major tracked hubs (i.e., US, ARA Europe, and Singapore) recorded weekly declines in commercial petroleum stocks.
Refined Products markets saw the official flip between gasoline and diesel; gasoline remained buoyant while diesel declined and for which crack spreads are now sitting $3/bbl below gasoline.
Investor Positioning data revealed that speculators were substantial buyers of crude futures and options contracts over the past week-through-Tuesday; at the highest level since last September’s rally, these positions are a flashing red warning signal of a potentially sudden and violent downside correction should these participants bolt en masse.
As Well As Washington’s pushback against Kyiv’s attacks on Russian energy facilities and new information on the Trans Mountain Expansion pipeline (an in-service date(?!) as well as early prices paid by the first Asian buyers).