Commodity Context

Commodity Context

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Commodity Context
Commodity Context
Oil Context Weekly (W8)

Oil Context Weekly (W8)

Crude prices rallied through the week before a macro-driven rout brought the barrel sharply into the red in a steep Friday selloff, while term structure and diesel crack spreads actually strengthened.

Rory Johnston's avatar
Rory Johnston
Feb 21, 2025
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Commodity Context
Commodity Context
Oil Context Weekly (W8)
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Happy Friday, Oil Watchers!

Every week, I summarize and analyze 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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Summary

Flat Prices spent most of the week steadily grinding higher on stronger timespreads and a collection of bullish headlines before a macro-driven rout took both the S&P 500 and crude prices sharply lower on Friday, with the barrel ending the week down nearly $0.50/bbl at just north of $74/bbl (Brent) in an abrupt reversal of what had been $2+/bbl weekly gains.

Timespreads stabilized after a month-long weakening trend: Brent and Dubai prompt spreads actually rallying into steeper backwardation while WTI remained comparatively beleaguered.

Inventories data were mixed but leaned bearish between sizable builds in ARA Europe, a small stateside build on seasonal weakness in the US, and a modest draw in Singapore.

Refined Products were split between diesel, which continues to grind higher, and gasoline, which pulled back notably and counter-seasonally (though mirroring last year’s experience).

Market Positioning data confirmed that speculators were once again notable sellers of crude futures and options contracts for the fourth consecutive week, bringing overall net position to a far more reasonable level from its recent and acutely overbought highs without triggering much in the way of violent price rout, continuing to highlight the comparative resilience of the crude market to this withdrawal of hot money flows.

As Well As Trump pledged to refill SPR “fast” and pressured Iraq to resume Kurdish exports through Turkey, Ukrainian drone attack reportedly throttles CPC pipeline flows, and Brazil joins OPEC+ and nothing changes.

What Happened This Week

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