Oil Context Weekly (W22)
Crude flat prices got jerked around by US trade policy developments and increasingly bearish OPEC+ chatter heading into the group’s weekend meeting, while term structure actually grew stronger.
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Summary
Flat Prices bounced between ~$63.50–66/bbl (Brent) on numerous, rapidly reversed US tariff developments before ending less than $1/bbl lower amidst rumours of an even steeper production hike from OPEC+ heading into the producer group’s Saturday meeting.
Timespreads strengthened across most major benchmarks, save Dubai, to counter the fears of surplus market supply; while Dubai remains the benchmark most exposed to rising OPEC+ production, it’s still far from signaling that the anticipated flood has begun making its way to market.
Inventories data were comparatively quiet but directionally positive, with stocks in each of the US, Singapore, and ARA Europe registering tiny draws; stock levels in the US—especially of higher-value road fuels—reached new depths.
Refined Products markets weakened notably as refining margins for both gasoline and diesel weakened counterseasonally; high-sulphur fuel oil, meanwhile, continues to trade at eye-wateringly strong levels.
Market Positioning data confirmed that speculators were modest net sellers of crude contracts over the past week and that we remain near the lower end of the positioning range experienced even over the course of this year, still leaving the bias of positioning risk still to upside.
As Well As the latest ride on the US tariff rollercoaster, OPEC+ pre-meeting rumours skew toward larger output hike, Kazakhstan’s days in OPEC+ feel numbered, and US crude production bounces back with force.