-We’re viewing this week’s flat price damage as a function of bullish frustrations and momentum chasing rather than new bearish fundamental revelations. In short, we think the market became impatient with a lack of visible inventory draws four months into OPEC cuts and that Chinese macro concerns, a modest (and possibly transient) uptick in Libyan production and an unimpressive EIA report lead to length liquidation, self-reinforced stop losses and momentum chasing from robots smelling blood in the water. – Prior to Thursday’s spread breakdown we viewed the relative strength of prompt WTI and Brent structure while flat price cratered as evidence that the market was over extended to the downside. We’re obviously reassessing this view now that WTI N17/Z17 and Brent N17/Z17 have broken down to their lowest levels since November and taken out every source of technical support on the trip. Using a wider lens though the spread […]