No fundamental evidence in the oil market to justify this week’s selloff – Goldman Sachs

Bloomberg reports headlines from the latest note published by Goldman Sachs on oil markets a day before.

Key Points:

There’s no fundamental evidence in the oil market to justify this week’s selloff in prices

“We view technicals rather than fundamentals as the driver of this move lower” 

The US inventory data released on Wednesday was “in line with expectations,” reiterating the bank’s sequentially higher second-quarter Brent price forecast of $59 a barrel

“The sell-off occurred an hour after the release of this U.S. data and accelerated as prices traded through their 50 and 100 day moving averages, a repeat of the March 7 and October 29 sharp decline in prices”

The “decline also featured an increase in open interest, suggesting that like in these previous instances, new shorts were the drivers of the move lower”

“We find in fact that the U.S. inventory data since March has been surprisingly good: crude inventories have been tighter than seasonal through March and April, with main petroleum products drawing faster than seasonal since February”