Oil Context Weekly (W8)
Crude slips its macro leash to finish marginally higher on the week despite a fresh year-to-date high for the US dollar; delayed positioning data confirms a resiliently bullish speculative backdrop.
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Every week, I summarize the developments in flat crude prices, calendar spreads, high-frequency inventories, refined products, and positioning data and then provide a taste of the themes I’m thinking about or following closely.
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Flat Prices fell to almost $80/bbl (Brent) on Wednesday as crude broke free of its macro leash in the second half of the week to end marginally up on the week at more than $83/bbl despite the US dollar finishing at a fresh year-to-date high.
Calendar Spreads mostly tracked the fate of flat prices, with both the prompt spread and the bellwether Jun/Dec spread falling alongside flat prices on Wednesday before recovering together on Thursday and ending the week more or less where they began.
Inventories data leaned bearish this week as stocks built across all major trading regions: inventories rose 3.3 MMbbl in the US, 0.6 MMbbl in ARA Europe, and 0.4 MMbbl in Singapore. Once again, the main headline was a substantial 7.6 MMbbl build in US crude oil inventories, which brings the year-to-date total build to a staggering 58.4 MMbbl.
Refined Products were mixed, with diesel crack spreads rising ever-so-slightly in New York Harbor while gasoline crack spreads fell back more notably.
Positioning data was finally released after a month of waiting, though only for ICE Brent as the CFTC is lagging the delayed reports out; our partial Brent-only view showed a speculative net position pullback on the week, but positioning remains near its most bullish level since late-2021, putting price risks to the downside.