The oil market is like London buses: you wait ages for one then several come along quickly. Oil was gathering strength to break out of its 4Q 2024 range in the latter part of December and the move finally arrived as January kicked off. Better yet, due to a wealth of supportive developments, it stayed above the inflection points.
All one needs to do when assessing the current state of the oil market is to look at assorted spreads. The structures of international crude oil benchmarks are strengthening and the backwardation in Heating Oil is also solid. They imply genuine physical tightness, and derivative traders are not afraid to react, notwithstanding the rather comfortable medium-term oil balance.
History might confirm in a decade or two that the US has not had a more consequential president, at least not in peacetime, than Donald Trump. The start of his second term is still a few days away, but investors already scrutinize every word he whispers. Cliches are boring but true. Action speaks louder than words, but at this stage all markets can do is to rely on his press conferences and social media posts.
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