M1 Brent futures strengthened into the week ending 17 June as geopolitical tensions accelerated between Israel and Iran. The front-month contract climbed from $66.60/bbl on 10 Jun to closing above the critical $70/bbl on 12 Jun before jumping to $75/bbl the next day. By 17 Jun, prices hit a high of $77/bbl but eased to $75/bbl. While RBOB and ICE LS gasoil flat price recorded similar gains, the M1 ICE LS gasoil crack rallied from $17.40/bbl on 10 Jun to $20.30/bbl on 17 Jun and $23/bbl at the time of writing on 19 Jun, pronouncing this week’s support in gasoil. Meanwhile, gasoline was less supported than crude, with the M1 RBBR dipping from $19.80/bbl on 11 Jun to $18.30/bbl on 17 Jun.
In line with these price movements, Onyx’s weekly CFTC COT predictor forecasts that money managers will add to their net length (longs minus shorts) in Brent futures and ICE LS gasoil futures while removing both long and short positions in the US RBOB gasoline futures. Producers/merchants are expected to be risk-off across the board, which, if true, would indicate an unwinding of producer and refiner hedging in crude oil and refined products.
