In recent weeks the oil market has seen negative sentiment drive prices lower based on expectations of heightened output (some of which have been realized) from recent problem areas including Canada, Nigeria and Libya while refining margins have collapsed and Brexit has added to macro/demand concerns. Over the last two months speculators have trimmed net length by 32 percent in NYMEX WTI and reduced net length in ICE Brent by 21 percent. During WTI’s rally from $26.05 to $51.67 many traders assumed that a gasoline demand boom and falling non-OPEC+Russia production would accelerate a clearing of the global crude supply overhang and lead to higher prices. Instead, traders are looking at a more negative macro picture, a global glut of gasoline is weighing on the entire complex and fear of another move into the $30s is gaining momentum. • In our view, however, a protracted move […]