Oil prices were hit by an abrupt reversal of sentiment last week, with investors selling at the fastest rate for four months, as the economic outlook worsened and fears eased that the G7 price cap on Russian crude would disrupt its exports.
Hedge funds and other money managers sold the equivalent of 59 MMbbl of the six most important petroleum futures and options contracts in the week to Nov. 15, the fastest rate since the week ended July 5.
The selling came after fund managers had been buyers in five of the previous six weeks, purchasing a total of 169 MMbbl, according to exchange and regulatory position records.
The most recent week saw sales concentrated in Brent (-30 MMbbl) and NYMEX and ICE WTI (-19 MMbbl), with lighter sales in European gas oil (-5 MMbbl), U.S. gasoline (-4 MMbbl) and U.S. diesel (-4 MMbbl).
Investors had been steadily accumulating bullish long positions in petroleum, especially crude, expecting OPEC+ output cuts and the price cap to reduce supplies more than the economic slowdown reduces demand.
But that confidence was dented last week as the economic outlook across Europe and Asia worsened while traders became convinced the cap would have little impact on oil supplies owing to widespread avoidance and evasion.
At the same time, China grappled with the largest outbreak of coronavirus cases for six months, with no sign of an early exit from the cycle of lockdowns, which will continue to depress oil consumption.
As a result, Brent futures prices and calendar spreads retreated as traders prepared for a relatively hard landing for the global economy which will likely cut oil consumption absolutely or at least relative to the previous trend.
2022-11-28 - Canyon Creek Energy - Arkoma LLC retained EnergyNet for the sale of operated working interest in two producing horizontal wells in Oklahoma’s Hughes County.
2022-09-08 - Natural gas pipeline and storage assets serve Dallas-Fort Worth region.
2022-10-10 - The asset sale on Oct. 10 included Martin Midstream’s Stockton Sulfur Terminal in California, which Gulf Terminals LLC agreed to acquire for approximately $5.25 million.
2022-09-06 - "We believe the merger is the logical next step in the continued evolution of the minerals space and creates an entity of scale with ever improving liquidity and float, as well as a streamlined cost structure that further reinforces the scalability of our industry," Brigham CEO Rob Roosa said of the company's merger with Sitio Royalties.
2022-10-20 - For Exxon Mobil, the sale of the Billings refinery ends a year-long effort by the U.S. oil giant to further reduce its refining footprint and concentrate production on plants along the U.S. Gulf Coast and in the Midwest.