- Oil prices pared early morning gains after Russia said a neutral Ukraine with its own army is a possible compromise option (BBG)
- The IEA warns of a supply shock unless OPEC boost production
- High oil volatility is reducing liquidity
- Disruptions to Russian oil exports threaten a supply shock that will further tighten the energy market unless OPEC boost output, according to the IEA (WSJ)
- The Paris-based IEA warned on Wednesday that the energy markets are facing the biggest supply crisis in decades
- Many oil consumers are shunning Russian oil purchases that could mean 3 MMBbl/d of supply effectively cut off from the global markets starting next month, the IEA said
- The agency cut its forecast for global oil supply by 2 MBMbl/d to 99.5 MBMbl/d, based on what OPEC has currently agreed to pump
- Oil’s wild price swings have removed market participants (BBG)
- Brent crude has slumped $40/Bbl in a little over two weeks
- Speculators and traders rushed to close out their profitable long positions amid Brent’s run up, causing Bren’t aggregate open interest to slip under two million contracts for the first time since 2015, according to Bloomberg
- Managed moned bets on rising crude on ICE plunged by the most since 2011 in the week ended March 8
- “The market is un-tradable, given the volatility,” said Gary Ross, an oil consultant, turned hedge fund manager at Black Gold Investors LLC
- “Volatility is so tremendous that it is forcing everyone to reduce their position size and forcing this liquidation.”