Oil Context Weekly (W49)
Crude rises on CPC terminal attacks and discussion of ever-harsher restrictions on the provision of maritime services to the Russian fleet, while OPEC+ agrees to new capacity estimation mechanism.
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Summary
Flat Prices rose ~$1.50/bbl for Brent to just shy of $64/bbl, supported higher by restrengthening risk appetite broadly as well as the combination of attacks on the CPC terminal and musings of ever-stricter G7/EU maritime service restrictions related to the Russian fleet.
Timespreads at the front of major crude futures curves were flat to higher, maintaining the up-and-down chop of prompt timespreads at modestly backwardated levels; overall, the current shape of crude futures curves (i.e., backwardated front, depressed belly, broad contango a year or more out) has stubbornly persisted for months.
Inventories data leaned modestly bearish thanks to counter seasonal builds in the US, albeit from a still very depressed starting base.
Refined Products are still easing back from the recent heights of their elevated crack spreads, with gasoline cracks feeling the relief of strong US inventory builds; diesel—still well below its recent highs—received a new shot to the arm following announced G7/EU plans to shift toward a firmer ban on western shipping services to Russian oil-laden (and diesel-laden) tankers.
Market Positioning data confirmed that speculators were net buyers of Brent contracts over the past week through Tuesday, pushing their collective net position back to a level that’s at the higher end of our experience over the trailing quarter, even if we’re still at the low end of our experience over the past year.
As Well As OPEC+ agrees to “historic” and “transparent” new capacity framework but the devil’s in the [lack of] details, CPC terminal suffers major attack and serious damage to tanker loading infrastructure, and EU/G7 weigh stricter ban on western maritime service provision to the Russian oil tanker fleet.