OPEC: Oil price recovery caused by financial players

OPEC+ believes a recent oil price rally might have been caused more by financial players rather than improvements in physical oil market fundamentals, an OPEC+ document showed.

Reuters reports that experts also called "for cautious optimism" due to the underlying uncertainties in the physical markets and macro sentiment, including risks from COVID-19 mutations that are still on the rise, the document said.

Key statements

Says upcoming seasonal refinery maintenance will reduce crude runs in 2q21 in many parts of the world.

Says notes widening backwardation of major benchmark crudes and increasing net-long positions in the financial markets.

Says to closely monitor price structure of key petroleum products, some of which are still in contango.

Call for "cautious optimism" due to the underlying uncertainties in the physical markets and macro sentiment, including risks from more transmissible and contagious covid-19 mutations that are still on the rise.

Market implications

This is bearish for oil prices in a tide that is going out on the bulls. 

WTI has dropped from a recent high near $63.80 to fresh lows today of $59.48.

WTI is down 0.82% at the time of writing.