Analysts at Normal Chartered revealed in a report despatched to Rigzone late final week that their crude oil positioning index noticed its largest single week decline in six years.
In line with the report, West Texas Intermediate (WTI) NYMEX fell 36.0 factors to -67.6, WTI ICE fell 17.7 factors to -96.5, Brent NYMEX fell 17.3 to 2.4, and Brent ICE dropped 28.9 factors to -27.6. The mixed crude oil Normal Chartered positioning index fell 41.6 factors to -67.0, the report highlighted.
The Normal Chartered analysts, who additionally revealed that their gasoline positioning index turned adverse for the primary time in 20 months, falling by 36.4 to -6.6, famous within the report that they suppose positioning in oil is now quick sufficient to be worth constructive.
“The reversal of gamma results at present costs must also assist a short-term transfer greater,” the analysts acknowledged within the report.
In its newest report, Normal Chartered famous that the Commodity Futures Buying and selling Fee (CFTC) had revealed the final of the backlog of positioning information that arose from a cyberattack on a third-party information supplier.
“The most recent launch reveals positions as of 14 March, 4 days after the collapse of Silicon Valley Financial institution however six days earlier than Brent reached a 14-month low of $70.12 per barrel,” the Normal Chartered analysts acknowledged.
Within the report, which mixed the CFTC information with equal Intercontinental Trade (ICE) information, the analysts famous that “there was heavy promoting of crude oil and gasoline, mixed with a fast transfer by funds into valuable metals”.
“Cash supervisor internet promoting throughout the 4 fundamental Brent and WTI contracts totaled 128.1 million barrels within the week to 14 March,” the analysts added.
“The following CFTC information … will present positions as of 21 March, a day after the worth low, and is prone to present an extra speculative unwind,” the analysts continued.
The most recent Power Data Administration (EIA) information was impartial, in line with Normal Chartered’s bull-bear index, the analysts mentioned.
“Whereas there have been sturdy attracts in gasoline and distillates, crude oil inventories rose 3.35 million barrels towards the five-year common, demand continues to be weak, and crude oil output rose,” the analysts acknowledged.
“After the torrent of adverse information earlier this yr, any constructive information is probably going to enhance sentiment. All that’s now wanted for the EIA information to grow to be extra bullish is just a few extra blue packing containers within the week on week crude oil steadiness to assist scale back the 33.65 million barrel surplus of crude above the five-year common,” the analysts added.
In a separate report despatched to Rigzone on March 21, analysts at Normal Chartered outlined that they thought their oil supply-demand steadiness was “comparatively benign when it comes to its worth implications”.
“It doesn’t lend a lot basic assist to the current push right down to $70 per barrel, however it additionally doesn’t assist any sustained surge this yr above $100 per barrel,” the analysts acknowledged in that report.
In its March 21 report, Normal Chartered projected that WTI would common $88 per barrel this yr, $95 per barrel in 2004, and $106 per barrel in 2005. Brent was projected to common $91 per barrel in 2023, $98 per barrel in 2024, and $109 per barrel in 2025 within the report.
In an announcement despatched to Rigzone final week, Wooden Mackenzie famous that China’s return to regular mobility is anticipated to drive a powerful restoration in world oil demand in 2023 “from each a base and excessive case perspective”.
“China being on the transfer once more after the Zero Covid coverage of 2022 will account for a million barrels a day of the two.6 million barrel per day achieve we anticipate in oil demand this yr,” Ann-Louise Hittle, Wooden Mackenzie’s Head of Macro Oils mentioned within the assertion.
“This could see Brent crude costs rising from present ranges to common $$89.40 per barrel for 2023,” Hittle added.
The extra bullish excessive case state of affairs would see elevated building exercise driving Chinese language oil demand even greater in 2023, Wooden Mackenzie mentioned within the assertion, highlighting that this might push annual oil costs greater by $3-$5 per barrel.
In an announcement posted on its web site on March 6, Goldman Sachs famous that, in line with a report from Goldman Sachs Analysis, oil costs may rise as excessive as $107 a barrel by the top of the yr “relying on how OPEC responds to rising market circumstances”.
In a while within the month, Bloomberg reported that Goldman Sachs analysts “now see Brent reaching $94 a barrel for the 12 months forward, and $97 a barrel within the second half of 2024, versus $100 a barrel beforehand”.
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