The Jan’25 Brent futures contract ultimately saw strength over the past week, initially trading around the $72/bbl level and dipping to an intraday low of $70.95/bbl on 15 Nov, before making a strong recovery up to $73.50/bbl by 19 Nov, with prices sustained at this level as of 09:30 GMT on 21 Nov (time of writing). This week, crude oil prices saw several bullish drivers; a power outage at Equinor’s Johan Sverdrup platform first reported by Reuters on 18 Nov saw Norway’s largest oilfield running at two-thirds of its full 755kb/d production capacity. Although the partial restart of production later in the week introduced some bearish sentiment, this was overshadowed by escalation in the Russia-Ukraine war, as Ukraine hit Russia with a US ATACMS long-range missiles for the first time, re-igniting concerns of potential supply disruption. At the same time, market players seem reluctant to take substantial positions based on this news, with the US stipulating that Ukraine must refrain from targeting Russian oil infrastructure as a condition for using their missiles. In line with recent strength in Brent crude, Onyx’s weekly CFTC COT predictor anticipates speculative players to add moderate length to long positions in Brent alongside a small reduction in shorts for the week ending 19 Nov. Managed-by-money long positions are expected to increase by 9.8mb, much lower compared to last week’s increase of 17mb. Meanwhile, speculative players are projected to decrease their short positions by almost 2.2mb.
