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Bullish Flows Offer Hope to Bulls

Minneapolis, MN | April 10, 2023 | By: Steve Sinos, Blue Lacy Advisors, LLC

Three Things:

  1. After a couple of weeks, during which traders focused on market mechanics and downside volatility, fundamental observers shared reasons for bulls to be optimistic.

  2. Early signs of tighter markets are encouraging, but the demand side still contains risks, as evidenced by regional nuances in otherwise bullish observations. Moreover, supply-side sentiment and constraints continue to point to slower production growth that bulls can pin the upside case on.

  3. Airline traffic was firm last month in both Europe and Asia. However, Asia still has a lot of catching up to do.

Crude Oil

Fundamentally, we continue to get signs of the slowly firming supply/demand landscape. Despite persistent economic/credit/liquidity risks, not to mention substantial disruptions on both sides of the S/D ledger, there is evidence that the bull case is gaining momentum. This is even reflected in the model’s component analysis, which showed a bullish tilt for the first time in months. Referencing seasonal pressures, trends in the change in storage positions, and supportive technical factors, Chai calculates a net bullish expectation for the end of summer. Seasonal trends point to recovering refinery runs, typical through the summer and into the fall. Maintenance patterns are reasonably predictable, and unplanned outages (France) are expected to subside.

*This summary is based off April 3, 2023

A free excerpt, such as this one, will be published on a delay periodically. This is an excerpt from Blue Lacy Advisors, LLC's (“Blue Lacy”) weekly commentary for clients, which is based on a collection of models, research/analytical subscriptions, and bespoke work. Each week Blue Lacy explores how market drivers included in these analyses might affect or be used in clients' planning, budgeting, and execution of strategy. Call Blue Lacy to make an appointment today!


Meet the Author!

Phone: +1-832-413-3124

Steve has spent his career in strategy, risk, trading, and investment. He works with investors to source investments in opportunistic or high growth sectors, with particular interest in early-stage companies solving clearly defined problems.

He is currently a Managing Partner with Blue Lacy Advisors LLC, giving management teams and investors confidence in their decision making by supporting strategic planning and execution, risk management, commodity trading, and market analysis.

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