In the week ending 16 Sep, the M1 Brent futures contract saw a bullish performance as it rose from $66 up to the $68.50/bbl level, reaching its highest level since 3 Sep. However, prices faced selling pressure at higher levels, given the various overhead resistance levels. Gasoline continues to see bullish sentiment amid lower y/y inventory levels in the US and persistent operational issues at Dangote’s RFCC. However, the spec change to winter-grade gasoline may limit the upside. Distillate cracks saw support, given ongoing Ukrainian strikes on Russian energy infrastructure amid the shift towards greater seasonal demand.
This week, we anticipate money managers adding length to their Brent and RBOB futures positions. In contrast, net length in gasoil is expected to decline, perhaps due to profit-taking flows and the pricing in of the geopolitical risk premium. Across the selected benchmarks, we expect a risk-on week for physical players, with prod/merc positions rising.
Further detailed information on other categories and contracts can be found in the report.
