The new week saw uncertainty return to the market as prices slipped back down to the lower end of the recent range to undo virtually all of the recovery made during the second half of last week. The tone was set on the opening as Jul’20 traded down from 10.55 to 10.38 within minutes. Negative macro factors were no doubt having an impact upon spec and algo activity and in the range bound conditions this proved a major driving factor. The macro was being exaggerated by a technical move that saw May’20 WTI futures trading down to $4 (at time of writing) on its penultimate trading day. This placed it at a huge discount to the rest of the board (which was merely around 10% lower) but illustrates how refiners are exiting the market as storage fills, with further weakness potentially following while the impact of covid-19 dictates market forces moving forward. Ongoing Covid concerns were also weighing heavy on the BRL where concerns over its spread and policy from Bolsonaro saw the USDBRL back to 5.30 and within a few pips of its all-time low. With all this in the background No.11 did rather well to hold above recent lows, reaching 10.03 (K20) and 10.22 (N20) intraday, though with settlement only just above these levels a further look lower seems likely to follow.
No.11 Futures
