The biggest surprise in last week’s data was the lack of buying of crude oil following the attack on the world’s biggest oil processing plant in Saudi Arabia. The record price jump in Brent triggered a surprise 3% reduction primarily through long liquidation while the gross-short instead of being reduced saw a small increase.
Money managers probably refrained from buying the market for a number of reasons. The initial price spike left the level unattractive and probably also forced some to reduce exposure as volatility spiked. Others are likely to have viewed the rally as being unsustainable at a time when demand growth is weakening.
WTI meanwhile was bought on the prospect of increased exports after the opening of new pipelines from Texas’s Permian shale oil basin to the U.S. Gulf coast.