On Friday there was some expectation that having reached the continuation high at 22.36 and with the COT expected to show a rise in the spec long, that we may have found the opportunity to take stock. The COT duly came in at 190,200 lots long, in line with expectations which are putting the live position above 200,000 lots, however the move from OPEC+ to cut production over the weekend meant that the commodity sector as a whole was reinvigorated. The opening saw May’23 immediately trading into the 20.30’s to make new contract highs, and though there was a pause in the rally soon afterwards it was not long before we kicked on to see the price up into the 22.50’s. Such is the desire from spec and trade longs alike right now that they will never pass up on such an opportunity, and so with the market now kicking on to new highs and reaching 22.63 with the US day still ahead there seemed to be no limit to the potential. With some irony therefore the market proceeded to turn around and slip back down into the range, losing ground as the limited consumer interest made for little support as any buying emanated through market orders with little allowed to rest. The correction continued to 22.19 to show the market back in debit, although with the longs out there was a little more defensive support being seen. Spreads also narrowed in on the move with May/Jul’23 back around 0.40pts, though again decent buying was being seen on scale from this level. The later afternoon was calmer as many participants took stock of the situation, however buying returned during the final 30 minutes as the spec sector looked to dress the close and ensure another strong chart position. Their efforts took May’23 back to settle at 22.40, above the previous highs which boosts the charts though with the macro likely to have to play a part in any sustained near-term continuation of the recent move.
Both No.11 and the wider macro were already making significant upward progress when the opening came around on the back of production cuts from OPEC+, and so it came as no surprise that the whites looked to follow suit and continue the meteoric recent rise. May’23 began the day at 635.00, and though it soon slipped back by a couple of dollars this merely represented some near-term consolidation before finding the buying interest to forge ahead once more. There continues to be a dearth of scale selling overhead which allowed the movement to take place relatively comfortably with May/Aug’23 finding a good deal of the volume as rolling continues into the penultimate week of the May’23 life. All was positive into the early afternoon with May’23 recording a high at $643.00, though a turnaround followed against long liquidation, and the lack of resting buy orders alongside some nervousness amongst longs given the overbought nature of the environment meant the price retreated all the way to $632.00. This placed the May/Aug’23 back around $11.00, however the white premiums remained firmer with some of Friday’s losses recouped as Aug/Jul’23 sat happily in the $139/$140 area. A calmer period led us through towards the close with defensive buying from specs duly arriving late on the pull values back higher, leaving May’23 to end the day at $633.40, a positive number though a long way shy of the highs. With other commodities also shy of their own highs but crude remaining firm it seems sure that the macro will continue to play a part over the coming days.
