Summary
Prices have fallen in the Oct’24 Brent futures, ICE LS gasoil futures and RBOB gasoline futures contracts in the week ending 05 Aug. While open interest has been on an uptick in gasoil and RBOB, Brent saw more de-risking into August.
Correlations between the crack spreads and crude oil futures saw a strong improvement. We also saw a strong positive correlation between middle distillate cracks and gasoline cracks.
The WTI/Brent curve lifted lower w/w amid softness in WTI alongside Brent. The Brent futures forward curve also shifted downwards along with the prompt Oct/Nov/Dec Brent futures fly.
Flows in USO and UCO ETF options flipped between buying and selling all week, albeit with stronger buy side volumes. The ultra-short SCO witnessed more selling.
M1 refinery margins weakened in Asia but strengthened in Europe. A weaker crude supported both margins, but acute product weakness in Asia pressured the M1 margin.
There has been a significant sell-off in equities all over the world, with the weakness in US equities especially predominant in tech stocks. This took the tech-heavy Nasdaq into correction territory.
A dovish Federal Reserve and a hawkish Bank of Japan has taken the USDJPY down from above 153 last week to 142 on 05 Aug.
Implied volatility (IV) rose for both call and put options in the benchmark crude contracts this week, although put options rose more significantly – especially in WTI.
