Oil Context Weekly (W5)
Crude prices eased lower this week as the market waited on Trump’s tariff decision, with Friday trading especially volatile on the back of multiple reported rumours and official denials.
Note: Apologies for the delayed publication, oil tariff news was breaking right up until—and then past—the last minute, and I wanted to include the most recent tariff news heading into the weekend.
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.
Another busy week for Commodity Context in the media, with much of the coverage centered around the US tariff threat against Canadian crude imports as well as revisiting the broader 2025 oil market outlook amidst a sea of US policy uncertainty. Check out some of those thoughts on:
Heatmap News’ Shift Key podcast and a follow-on write-up;
The MacroVoices podcast;
CreditSights’ Know More Risk Better podcast; and
Politico’s exploration of Trump’s energy-related policy priorities
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Summary
Flat Prices grinded lower to end around $76.75/bbl (Brent), down ~$1.75/bbl from last Friday’s close but still holding onto that new mid/upper $70s range.
Timespreads were comparatively resilient, after confirming much of the flat price pullback over recent weeks; the relatively-flat performance of key timespreads indicates that much of the week’s flat price declines were based on sentiment rather than a deterioration in global fundamentals—though WTI spread did specifically weaken following confirmation of the first commercial crude build since mid-November.
Inventories data confirmed sizable draws across all major tracked hubs, with crude and residual fuel stocks scraping the bottom of seasonal expectations while refined products remain ample, especially in Europe.
Refined Products re-strengthened, with diesel continuing to gain along year-ago trends—albeit at a lower overall level—while gasoline remains beleaguered, weighed down by among other things the acute overhang of stocks in European hubs.
Market Positioning data confirmed that while speculators were net sellers of crude this week, their share of overall open interest in those contracts rose to a fresh highest level since early April 2024 as broader OI fell back more quickly; this level of overbought speculative positioning is highly concentrated with negative price returns over the following month and both upside is limited and the probability of a sharp downward correct increases.
As Well As Trump considers Venezuelan oil treatment, acutely confuses the market on timing and status of tariffs on Canada and Mexico, mused about oil exemptions for the first time before at the last minute (as of writing) stating they were indeed being applied to oil but at a lower 10% range, and Canadian tariff threat harms analytical value of some traditional oil market signals.