Oil Context Weekly (W37)
Soured macro sentiment weighed on flat prices despite strengthening calendar spreads
Welcome to the inaugural Oil Context Weekly (OCW), my new wrap-up of the market analysis, newsflow, and data releases that matter. This shorter and more informal note will be in addition to my normal deep-dive research (stay tuned for a piece decomposing the collapse of Chinese oil demand early next week).
Check out my interview with BNN Bloomberg from earlier this morning on many of these same themes.
Flat Prices: range bound between $90-$96/bbl (Brent), but sentiment soured through the latter half of the weak and contracts very narrowly avoided dipping below $90/bbl amid broad selling pressure.
Calendar Spreads: calendar spreads were far less dour than flat prices and prompt spreads actually marked weekly highs just before publishing on Friday; the Dec22/Dec23 bellwether spread traded choppy but directionless through the week, all lending credence to the idea that this was mostly a macro sentiment rather than physical weakness story.
Inventories: Commercial petroleum inventories continued to rise in the US but fell further in Europe and Singapore, which had in previous weeks witnessed a return back to the 5-year average on an aggregate product basis.
Positioning: Speculative positioning in major crude futures and options contracts ticked up very slightly this past week (ending Tuesday) but remains exceptionally weak, near the lowest level on a nominal barrel basis since the depths of early 2020.