Oil Context Weekly (W47)
Crude ended the week virtually flat, down a mere 0.04%, despite plenty of OPEC-driven volatility over shallower US Thanksgiving holiday trading.
Every week, I summarize developments in flat crude prices, calendar spreads, high-frequency inventories, refined products, and positioning data, as well as a taste of the themes I’ve been thinking about or following closely.
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Flat Prices were nearly unchanged, shedding only $0.03/bbl despite volatile, OPEC-driven trading; nonetheless, this marks the fifth consecutive down week for crude.
Futures Curve was mostly unchanged with very slight steepening; the interesting takeaway comes more so from the differentiated signals between prompt and Jun/Dec spread movement timing than from the magnitude of those moves themselves.
Inventories data leaned bearish with modest builds in ARA Europe and Singapore punctuated by a large build in the US—worse for crude prices, the US build was overwhelmingly driven by sizable 8.7 MMbbl inflow of crude stocks that brings the three-week cumulative crude build to a whopping 26.2 MMbbl and current crude levels back from the bottom of the seasonal range.
Refined Products are strengthening as both diesel and gasoline crack spreads seem to have found a near-term bottom and started to press higher once again; high sulphur fuel oil (HSFO) crack spreads have also made an impressive recovery over the past couple of weeks, which, likely, reflects the return of refining units previously offline for seasonal maintenance.
Investor Positioning [Brent only, WTI delayed until Monday for Thanksgiving] data confirmed that speculators were net sellers of Brent contracts to the tune of 15.9 MMbbl, concluding the 5th consecutive week of speculative net liquidations.
As Well As OPEC+ rumours, disputes, and an eventually meeting delay—rescheduling this weekend’s planned in-person meetings to a virtual event next Thursday, November 30th.