The muted price re-action to last week’s encouraging demand estimates, falling OPEC+ supply, declining inventories and mitigated inflationary pressure is a warning signal that unless China joins the party the path upwards will be paved with pitfalls.
The current move up started in July. ICE Brent has rallied 15%, CME Heating Oil 29% and RBOB 18%. At the end of June US retail gasoline sold for $3.685/gallon. Fast forward 6 weeks and it is 7% more expensive.
The reference to the Superman comics when traders utter ‘its ripping its shirt off’ is used too much and becomes watered down, but at present it is fairly apposite for the products market.
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