Oil Context Weekly (W30)
Rock solid week for the barrel, which saw notable gains across crude flat prices and calendar spreads as well as continued rallies in refined product cracks.
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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Flat Prices rose ~$3.70/bbl to finish the week at nearly $85/bbl (Brent), which is its highest level since mid-April; meanwhile, WTI closed above the all-important psychological threshold of $80/bbl for the first time in as long.
Calendar Spreads widened, confirming the strength seen in flat prices and leaving a nice buffer between both Brent and WTI’s prompt contracts and the risk of contango, which should help maintain investor appetite for those contracts.
Inventories data were mixed but leaned bearish as a small draw in the US and a small build in ARA Europe were outshined by the largest weekly build in Singaporean product stocks since May 2022.
Refined Products continued their gains and now both gasoline and diesel crack spreads in New York Harbor are hanging around the $40/bbl mark, the highest level for diesel since mid-March and for gasoline since last summer.
Positioning data revealed that speculators were modest net buyers of crude in the week-through-Tuesday, very slightly lifting the net position as a share of total open interest and maintaining more-or-less neutral positioning risk at current levels; buying appetite remained disproportionately tilted toward WTI rather than Brent contracts.