Crude oil positions diverged for a second week as the WTI net-long rose by 9k lots while Brent saw a 75k lots reduction to 79k lots, the lowest since November 2014.
The usual tight trading correlation between WTI and Brent has temporarily broken down with daily price swings of more than 10% and volatility close to 200%.
Brent is the contract that best reflects the global demand shock and the challenge it is to swallow all the additional supply from Russia and the Middle East over the coming months. The WTI contract was net bought last week, probably in response to speculation that the US would support the domestic market. It helped reduce WTI's long-held discount to Brent, so much that it temporarily disappeared before widening again to the current$3.2/b.
While gross long positions in both were reduced amid the 22% sell-off, the WTI gross short was cut by 28k lots while 30k lots were added to Brent. Overall the combined net-long dropped to 202k lots, a level this low last seen in December 2012.