Oil Comparative Inventory

There is an aggressive ~$11.00 premium included in WTI pricing despite generally bearish fundamentals.

There are no bullish fundamentals for oil. WTI is in contango. Inventories are approaching the 5-yr avg. Futures are below the 100- & the 50-day avgs. C.I. indicates WTI is at least $7.50 over-priced.

Oil-price discovery excursions often last for weeks or even months before exuberant expectations of counter-parties intersect with market fundamentals.

Oil-price volatility moved from a weekly average of 37% to 25% more than the the pre-pandemic average.

This week’s increase in oil comparative inventory was the among largest of the last year. The SPR release of 0.8 mmb was the smallest

The WTI future strip moved from 3- to 7-month contango reflecting limited supply urgency.

WTI will average less than $20 in May WTI remains grossly under-priced. That sends the strongest possible signal to producers to shut in their wells. Oil prices will remain depressed…