Oil Context Weekly (W40)
Crude had its largest weekly gain since March and seems to have slipped its macro leash on the back of OPEC+’s decision to cut production
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Summary
Flat prices rose roughly $10/bbl from last week’s close to ~$98/bbl (Brent) as of writing—their largest weekly gain since March—following OPEC+’s first material production cut since early-2020; perhaps more notable than the price gain itself, oil managed to rise alongside the US dollar.
Calendar spreads had a relatively uneventful week despite the OPEC+ kerfuffle and rising flat prices, with both the prompt and bellwether Dec/Dec spread widening marginally but mostly trading sideways through the week.
Inventories fell by their fastest pace of the year in the US last week; however, smaller builds in Europe and Singapore mitigated some of the total global draw.
Crack spreads widened across North America while global diesel markets flashed signs of extreme tightness amidst low inventories, a heavy refinery maintenance schedule in Europe, and still-ongoing French refinery strikes.
Positioning data indicated that speculative participants were net-buyers through this past Tuesday heading into the OPEC+ meeting, with the net speculative position rising to its highest share of total open interest since June.