Crude market weakens; Ukraine negotiations to rile markets
Commentary summary:
• Rising stocks help Nymex WTI spreads towards contango
• WTI looks very cheap in Asia, forward Murban outlook looks bearish
• The threat of more Russian barrels in the West vs the East (one permutation of the peace negotiations due over the Ukraine) a potential bull case in Asia.
• (Low conviction) wider WTI/Brent call bearing fruit but not for long.
• Brent strength vs Dubai did work out w-o-w; the setup looks the same with WoS crude cheap in Asia (so buy dips).
There is seemingly plenty to be bearish about in the crude market, the biggest factor now being the outcome of Ukraine negotiations. Russian oil may partially come back to the legitimate market, though there are of course many permutations as to the end result here.
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