The Apr’25 Brent futures contract began the week ending 28 Jan rangebound between $77.80/bbl and $78.80/bbl before softening further mid-week and hitting $76.10/bbl on 28 Jan. In line with this weakness, Onyx’s CFTC COT predictor forecasts that managed-by-money players will liquidate 11.5mb of their long ICE Brent positions while their short-positioned counterparts add 3.8mb to their shorts. Producers/merchants are expected to add to length while exiting short positions, which, should this take place in 31 Jan’s COT report, may indicate a decline in producer hedging. In the week ending 28 Jan, players were cautious amid uncertainty surrounding Donald Trump’s proposed tariffs on Canada and Mexico while awaiting further announcements regarding possible sanctions on Russian and Iranian crude. In addition, the market was also poised for a decline in liquidity towards the end of the week due to the Lunar New Year holidays in Asia.
