Oil Context Weekly (W29)
Crude prices rose a buck a barrel, still attempting to durably consolidate above $80/bbl, while key refined products outperformed; spec positioning shifts to WTI from Brent.
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Every week, I summarize the developments in flat crude prices, calendar spreads, high-frequency inventories, refined products, and positioning data and then provide a taste of the themes I’m thinking about or following closely.
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Summary
Flat Prices rose a dollar per barrel to around $81/bbl, trying their best to finally consolidate above $80/bbl before exploring the rest of early-2023’s higher price range.
Calendar Spreads were uninspiring, moving more-or-less inline with flat prices, but they did end the week less backwardated on both a prompt and Dec23/Dec24 basis; prompt WTI spreads are now trading steeper than Brent.
Inventories data were modestly yet consistently bullish with draws across all major tracked hubs; inventories in Singapore, in particular, are getting quite low as the rapid depletion of light distillate stocks pushes overall volumes to the very bottom of their typical seasonal range.
Refined Products outperformed crude, with both gasoline and diesel crack spreads gaining about $5/bbl in New York Harbor as global product inventories continue to ease.
Positioning data revealed that speculators were small net-buyers of crude, with the biggest move coming between benchmarks as speculative length fled Brent and dove into WTI; with the net spec position now at ~7.3% of total open interest, positioning doesn’t present any clear directional risk to current prices.