Oil Context Weekly (W6)
Crude prices ease on combination of US presidential jawboning, a notable weakening in term structure, and a long-awaited pullback in overstretched speculative positioning.
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Summary
Flat Prices eased just more than $2/bbl to finish just below $75/bbl (Brent); while the obvious headlines related to Trump’s attempts to jawbone the price of crude lower, a parallel easing in term structure added fundamental support to the pullback.
Timespreads saw more than half of last week’s prompt backwardation erased, with timespreads heading steadily lower despite the ups and downs witnessed in flat pricing.
Inventories data were mixed given a sizable build in Singapore, further headline draws in ARA Europe, and a modest total liquids draw in the US that was overwise dampened by the largest stateside crude build since this time last year.
Refined Products were split between a notable strengthening in gasoline crack spreads (even after accounting for the monthly roll) and a modest easing in diesel margins.
Market Positioning data confirmed the largest pullback in speculative positioning since September, when speculators sold off to all-time lows in crude; this week of selling takes some of the positioning risk out of crude and the fact that the market was able to absorb the selling with relatively modest price declines is another positive sign.
As Well As US tariffs on Canada and Mexico delayed for 30 days, coastal pipeline prospects get rare political narrative boost in Canada, the Trump Administration restores “Maximum Pressure” campaign against Iran, and OPEC+ chatter gets louder ahead of planned April 1st production hike.