Outrageous Predictions
Executive Summary: Outrageous Predictions 2026
Saxo Group
Read Saxo's Outrageous Predictions for 2026, our latest batch of low probability, but high impact ev...
You can access both of our platforms from a single Saxo account.
Crude oil squeezing higher with focus on US-China talks
Ole Hansen
Head of Commodity Strategy
Summary: Raised hopes of a US-China trade deal driving stocks higher, a softer dollar and output cuts have supported oil following its December collapse, but worries about the global economy still nag.
Brent crude oil has returned to $60/barrel while WTI has moved back above $50/b as hopes of a deal between the US and China on trade continues to build. Yesterday, US President Trump tweeted: “Talks with China are going very well” and that was followed by news of an unplanned extension of the talks into Wednesday. These developments have supported a continued recovery in global stocks following a miserable December. Adding to this are a softer dollar and ongoing production cuts from the Opec+ group, which have all supported the current change in sentiment.
After finding support at $50/b last month Brent crude has swiftly returned to the November-to-December consolidation area between $57.50/b and $64/b:
After finding support at $50/b last month Brent crude has swiftly returned to the November-to-December consolidation area between $57.50/b and $64/b:
A trade deal between the US and China, however, is likely to slow but unlikely to reverse the deterioration seen recently in forward-looking economic data from the US to Europe and China. On that basis the upside at this stage may be limited to the upper area of the mentioned consolidation area for Brent at $64/b and WTI at $55/b.
Another reason why the bulls may need to be patient can be seen in the developments of the forward curve and the open interest in the two major oil contracts of WTI and Brent. A rally driven by fundamentals, such as the outlook for a tightening, would normally trigger a flattening of the forward curve, as the contango – the prompt months discount to deferred – begins to narrow.
As per the chart below we find that the six months spread between February (CLG9) and August (CLQ9) has hardly moved since December. Hedge funds would normally during a rally cut short positions while adding fresh longs. However, since the December 24 low the open interest in WTI has only risen by 61k lots while in Brent it has only risen by 36k lots. This could indicate that the rally has been short covering more than fresh longs entering the market.
Please note that due to the US government shutdown the CFTC has not issued any Commitments of Traders reports since the week of December 18. The COT report provides an important weekly insight into the size and direction of positions held by hedge funds across key futures markets from currencies to bonds and not least commodities.
Another reason why the bulls may need to be patient can be seen in the developments of the forward curve and the open interest in the two major oil contracts of WTI and Brent. A rally driven by fundamentals, such as the outlook for a tightening, would normally trigger a flattening of the forward curve, as the contango – the prompt months discount to deferred – begins to narrow.
As per the chart below we find that the six months spread between February (CLG9) and August (CLQ9) has hardly moved since December. Hedge funds would normally during a rally cut short positions while adding fresh longs. However, since the December 24 low the open interest in WTI has only risen by 61k lots while in Brent it has only risen by 36k lots. This could indicate that the rally has been short covering more than fresh longs entering the market.
Please note that due to the US government shutdown the CFTC has not issued any Commitments of Traders reports since the week of December 18. The COT report provides an important weekly insight into the size and direction of positions held by hedge funds across key futures markets from currencies to bonds and not least commodities.
Later today at the usual time of 15:30 GMT the EIA will publish its Weekly Petroleum Status Report. The recent trend towards falling crude stocks and a rapid build in products look set to continue if API’s data and surveys are correct.
Latest Market Insights
Outrageous Predictions 2026
-
-
Outrageous Predictions
A Fortune 500 company names an AI model as CEO
Charu Chanana
Chief Investment Strategist
Can AI be trusted to take over in the boardroom? With the right algorithms and balanced human oversi... -
Outrageous Predictions
Despite concerns, U.S. 2026 mid-term elections proceed smoothly
John J. Hardy
Global Head of Macro Strategy
In spite of outstanding threats to the American democratic process, the US midterms come and go cord... -
Outrageous Predictions
Dollar dominance challenged by Beijing’s golden yuan
Charu Chanana
Chief Investment Strategist
Beijing does an end-run around the US dollar, setting up a framework for settling trade in a neutral... -
Outrageous Predictions
Obesity drugs for everyone – even for pets
Jacob Falkencrone
Global Head of Investment Strategy
The availability of GLP-1 drugs in pill form makes them ubiquitous, shrinking waistlines, even for p... -
Outrageous Predictions
Dumb AI triggers trillion-dollar clean-up
Jacob Falkencrone
Global Head of Investment Strategy
Agentic AI systems are deployed across all sectors, and after a solid start, mistakes trigger a tril... -
Outrageous Predictions
Quantum leap Q-Day arrives early, crashing crypto and destabilizing world finance
Neil Wilson
Investor Content Strategist
A quantum computer cracks today’s digital security, bringing enough chaos with it that Bitcoin crash... -
Outrageous Predictions
Taylor Swift-Kelce wedding spikes global growth
John J. Hardy
Global Head of Macro Strategy
Next year’s most anticipated wedding inspires Gen Z to drop the doomscrolling and dial up the real w... -
Outrageous Predictions
SpaceX announces an IPO, supercharging extraterrestrial markets
John J. Hardy
Global Head of Macro Strategy
Financial markets go into orbit, to the moon and beyond as SpaceX expands rocket launches by orders-... -
Outrageous Predictions
China unleashes CNY 50 trillion stimulus to reflate its economy
Charu Chanana
Chief Investment Strategist
Having created history’s most epic debt bubble, China boldly bets that fiscal stimulus to the tune o...