Oil, though, was unable to escape the broader risk-off move in markets yesterday. ICE Brent settled 2.5% lower on the day, ING's commodity experts Ewa Manthey and Warren Patterson note
Oil market sentiment is largely negative
"A variety of factors put downward pressure on the market: persistent demand concerns amid tariff uncertainty; Trump’s pressure on the Fed; and progress in nuclear talks between the US and Iran."
"While the flat price has come under renewed pressure, the prompt timespread has strengthened. It's trading close to US$1/bbl backwardation. This suggests that the spot market is still relatively tight. In addition, refinery margins have been relatively well supported despite growing demand concerns. Our balance shows a sizeable surplus in the final quarter of this year, while the forward curve only flips into contango from early next year."
"However, positioning data still shows market sentiment is largely negative. Speculators sold 56,887 lots over the last reporting week, leaving them with a net long of 98,951 lots. This is the smallest position since October. The bulk of the move was driven by longs liquidating."
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