In the week ending 22 October, Brent and WTI futures both saw relatively rangebound price movements as the market grappled with fluctuating geopolitical risk sentiment and sluggish Chinese oil consumption. In terms of positioning, money managers got increasingly shorter. Until Israel’s strike on military targets in Iran over the weekend which ultimately deflated the geopolitical risk premium, uncertainty prevailed, with participants expressing varying views regarding potential escalation and ceasefire negotiations. Lacklustre demand from China weighed on sentiment as OPEC and the IEA both cut their global oil demand growth forecasts, with China’s economic troubles being the common denominator.
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