In the week ending 02 Dec, M1 Brent futures saw almost no net change. The contract closed at $62.50/bbl on 25 Nov, reached $63.75/bbl on 01 Dec, and fell to close at $62.45/bbl on 02 Dec as volatility stagnated, and prices remained constrained by the downward channel. Geopolitical tensions have not eased, with US President Trump intensifying his narrative against Venezuela, and President Maduro accusing the US of pushing for regime change to seize oil reserves. A ceasefire between Russia and Ukraine has also eluded us this week. We forecast money managers to close almost 11mb of their length and add over 8.2mb shorts. This bearish pattern was also seen in the forecasts for RBOB and Gasoil.
The M1 RBOB swap crack inched up in the week, but failed to pass the 20-day moving average. The contract rose from closing at $13.90/bbl on 25 Nov, failed to maintain strength above $15.50/bbl and dropped to close at $14.75/bbl on 02 Dec. EIA stats released on 26 Nov showed a build in US gasoline stocks of over 2.5mb. Money managers’ net position is expected to drop with 2.7mb of length expected to be removed. The M1 gasoil crack continued to be under pressure, dropping from a weekly high of $29.00/bbl to close at $25.40/bbl on 02 Dec. This matches the most significant addition of shorts predicted across the contracts, with an increase of 8.3mb forecast.
Further detailed information on other categories and contracts can be found in the report.
