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Oil Context Weekly (W37)
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Oil Context Weekly (W37)

Soured macro sentiment weighed on flat prices despite strengthening calendar spreads

Rory Johnston's avatar
Rory Johnston
Sep 16, 2022
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Oil Context Weekly (W37)
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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.

What Happened This Week

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