Oil Context Weekly (W14)
Calm after the cut: crude prices gained ~$5/bbl on Monday’s open following OPEC+’s surprise cut announcement and then proceeded to experience their least volatile trading week in ~18 months.
Happy Good Friday,
This is a shorter Easter edition of Oil Context Weekly given that markets are closed for the holiday and oil chatter is still dominated by the weekend’s surprise OPEC+ cut, which I discussed earlier this week in Surprise! An OPEC Cut.
Happy Easter to all who observe and I hope the long weekend yields everyone some well-earned time off with loved ones.
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Summary
Flat Prices rose ~$5/bbl immediately to start the week thanks to OPEC+’s surprise cut; from there, prices traded in their narrowest weekly range in the past 18 months.
Calendar Spreads strengthened notably following the OPEC+ cut announcement, even managing to pull prompt WTI spreads back into backwardation for the first time this year.
Inventories data were again bullish as US commercial stocks fell for the fourth consecutive week—the third week with very large draws of more than 10 MMbbl.
Refined Products confirmed last week’s mild gasoline premium over diesel beyond any doubt, widening to more than $5/bbl in New York Harbor.
Positioning data confirmed that spec positioning in WTI continued to surge, completely recovering to pre-banking-crisis levels on a net-barrel basis and unsurprisingly helped by OPEC+’s weekend prodding.