In the week ending 22 July, the Sep’25 Brent futures contract saw little net change. The contract opened at above $69.10/bbl on 15 Jul and failed to maintain support above $70.00/bbl on 18 Jul, forming a shooting star candlestick with a high of over $70.75/bbl. Brent then softened to close at $68.75/bbl on 22 Jul, which shows a w/w drop, although looking at the longer term, the M1 contract has been on an uptrend of higher lows since 02 Jun. 21 Jul saw China’s central bank holding lending rates steady after stronger-than-expected Q2 GDP, despite a Q/Q slowdown. With few major data releases ahead, markets are focused on the looming 1 Aug deadline for US trading partners to start paying reciprocal tariffs, especially the 30% levy targeting the EU. The EU also approved its 18th round of sanctions on Russia, including a ban on imports of fuel made from Russian crude in third countries, aimed at curbing diesel flows from places like India. But the market reaction was muted, likely due to the weak US backing.
Onyx’s CFTC predicting model forecasts Brent’s net positioning to rise for a third consecutive week. In the products, we forecast a closure of length and addition of short positions in both RBOB and gasoil.
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