The Jul’25 Brent futures contract climbed from $61.13/bbl on 7 May to closing above the $66.50/bbl handle on 13 May, where it met resistance. At the time of writing on 15 May, the benchmark M1 crude futures contract stands at $64.15/bbl. Support came into the contract following news on a trade agreement between the US and China involving both nations substantially reducing each other’s tariffs to a baseline level for 90 days. Moreover, Saudi Arabia’s crude oil allocations to China came in steady m/m, squashing fears that the Kingdom was vying for a market share war. Nevertheless, some pressure may have emerged from a rise in EIA-reported US crude oil inventories towards the end of the week, although any positioning changes from this will not be reflected in the CFTC COT report out on 16 May, for the week ending 13 May.
In line with this week’s price support, Onyx’s weekly CFTC COT predictor forecasts money managers will add to their long positions in Brent futures, ICE LS gasoil futures and the US RBOB gasoline futures. We further expect to see rising producer hedging in Brent futures, but anticipate prod/mercs to be risk-off in ICE gasoil and RBOB futures.
