It's Funny, Oil Market Has The Exact Opposite Setup Vs Last Year
This year feels a lot like the reverse of last year. Why am I saying this?
There was an article I wrote last year in April titled, "Physical Oil Market Continues To Weaken Pressured By China Lockdown And SPR Release While Energy Stocks Should Buck The Trend." Yes, it's quite a long title. But in it, one of the bearish signals we used was the collapse in Brent timespreads.
Fast forwarding to today, we have almost the exact opposite headline playing out:
Market participants doubting OPEC+ and Russian oil production cut vs the massive decline assumption on Russian crude last year.
US oil demand weakening last year vs strengthening this year.
SPR release started last year vs possible SPR refill this year.
Physical oil market weakening last year vs tightening/strengthening this year.
The parallels between last April vs this April are quite telling. I think people are materially underestimating many of the hidden bullish variables we are seeing. While there are still concerns surrounding the macro environment, one must focus on the data and the data is screaming something completely different than the narrative.