Oil Context Weekly (W45)
Crude prices rise on OPEC+’s output liftoff delay and then chop violently sideways following US election as participants attempt to handicap the effects of Trump’s second term on global oil markets.
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Summary
Flat Prices rose modestly following OPEC+’s production hike delay and heading into the US presidential election but, then, whipped violently back and forth following confirmation of Trump’s win given ongoing debates about the likely impact of his second term on the oil market.
Timespreads weakened despite gains in flat price, casting a darkening shadow on range bound markets more related to worsening current conditions than anticipated future Trump developments.
Inventories data was mixed but leaned bearish, with a large build in Singapore, a small draw in ARA Europe, and an “other oils”-driven headline draw in the US that masked builds across all major products.
Refined Products partially reversed last week’s moves as gasoline margins rose while diesel cracks took a smaller step back.
Positioning data confirmed that speculators were sizable net buyers of crude contracts over the past week through Tuesday (the day of the US election) following OPEC+’s production hike delay and brought us back to the lower end of neutrality, but the post-election selloff has undoubtedly brought us back into oversold territory once again—notably absent from recent moves has been much appetite for the previously entrenched cycle over overbuying on the other side.
As Well As OPEC+ once again delays planned December production liftoff, Trump heads back to the White House and spices up 2025 oil market outlook, with wide-ranging implications from likely shifts in US sanctions policy, proposed universal import tariffs, and an overhyped promised return to Drill-Baby-Drilling, Canada announces a controversial tighter cap on oil and gas sector emissions, and the Biden administration buys its final barrels for the ongoing SPR refill.