Welcome to Oil Context Weekly, my more informal wrap-up of the market analysis, news flow, and data releases that matter.

If you’re already subscribed and/or appreciate the free summary, hitting the LIKE button is one of the best ways to support my ongoing research.

(Source: Bloomberg Terminal; Brent = White, US Dollar Index, inverted = Blue, Copper = Orange)

Summary

Flat Prices were range bound and generally directionless through most of the week, but mounting bearish macro sentiment caught up with the barrel and pressed prices steeply lower on Friday to their lowest level since January.

Calendar Spreads reflected the general bearishness of crude’s week and both the prompt spread and the bellwether Dec22/Dec23 spread ended the week lower, though remain notably backwardated and still a decent way off from a sign of substantial worry (yet).

Inventories data added further downside weight to the barrel, as high frequency stock data reported builds across all major regions (US, ARA, and Singapore) on a commercial total petroleum basis.

Crack spreads marked a decent rebound across the refined product complex, in stark contrast to the unambiguously negative week for crude, reversing most of last week’s distillate losses while also demonstrating real strength in gasoline for the first time in more than a month.

Positioning data showed a notable improvement in net speculative positions through Tuesday, mostly via a liquidation of short contracts;  however, it’s a reasonably safe bet that by the end of the week those positions got dumped once again (or new shorts established) and added fuel to the macro inferno that took crude lower on Friday.

What Happened This Week