Oil Comparative Inventory

The range-bound price situation that dominated oil markets since late 2022 appears to have ended with much higher price volatility.

Traders & journalists will find reasons to paper over the seriousness of the banking crisis but the truth is that WTI prices should be $60 based on inventory levels.

Market fundamentals remain bearish as the range of WTI over-pricing moved up from $12.50-$17.50 last week to $15.50 to $20.50 this week.

The range of WTI over-pricing moved down from $16.50-$20.50 last week to $12.50-$17.50 this week.

Everything about fundamentals indicates that WTI is $16.00-$20.00 over-priced.

I expect another week of warmer-than-normal weather and weak natural gas storage withdrawals.

Comparative inventory increased the most since early April 2020 and is now more than the 5-year average.

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.