Crude finished last week firmer, capping what has been one of the most volatile weeks in oil market history. We saw the 2nd largest intraday move, a 32.05% ($32 day) range day, April 17th 2020 (a $52 range day) being the largest.
Oil Price News: WTI Volatility Is About to Get Even Wilder – Are You Prepared?
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Key Points:
- The market has absorbed over 500 million barrels of additional supply from the G7 SPR release, OPEC output increases, and returning Russian storage, yet prices remain firm. This indicates the constraint is not headline supply, but delayed flows and logistical friction keeping the front end tight.
- The Strait of Hormuz is not closed, but it is effectively impaired, and the market is pricing it accordingly. U.S. naval escorts introduce escalation risk rather than resolution, while secondary routes like Bab el-Mandeb now carry elevated disruption risk, keeping a persistent bid under crude.
- Positioning is increasingly crowded, with commercial hedgers selling into strength while money managers and institutional flows remain heavily long. The structure is bullish but fragile, leaving the market exposed to sharp liquidation if the geopolitical narrative shifts.
