In the week ending 3 June, the M1 Brent futures contract softened to a low of $62.60/bbl on 30 May, then recovered to close at $65.60/bbl by 3 June. After that, prices moved sideways, dipping briefly to $64.45/bbl on 4 June when the EIA reported a sharp build in US gasoline and distillate inventories for the week ending 30 May. Meanwhile, the M1 ICE LS gasoil crack rallied from a low of $16.10/bbl to nearly $17/bbl in the week ending 3 June, before easing to $16.60/bbl following the EIA news. By contrast, the M1 RBOB crack weakened to a low of $20.25/bbl in the week ending 3 June. Prices fell below $20/bbl post the EIA news on 4 June, but met support here.
Focusing on price movements until the week ending 3 June and ignoring the EIA-induced weakness noted on 4 June, Onyx’s CFTC predictor anticipates a sizeable de-risking in Brent futures by long-positioned money managers and producers/merchants in the week ending 3 June. Net long (longs – shorts) managed-by-money positioning is estimated to decline by 6.9mb in the ICE Brent futures. Similarly, RBOB is expected to see an exodus of long speculative positioning in 6 June’s official COT report. On the other hand, ICE gasoil is expected to witness a 4.4mb rise in long money managed positioning in the week ending 3 June – echoing the counter-seasonal support we have seen in ICE gasoil recently.
