April WTI expiry day.

Bring on Villareal! SFOT likes the Champions league draw very much and he is looking forward to a visit to the emirates stadium this time.

Back to the energy space. April WTI expires today but SFOT is not a physical trader and shall not look too much into price action in that contract today, however, the spread in the physical market post expiry will post interest to him especially with regards to the front wti spreads. The biggest performer yesterday was Natgas... a 15% rally right after the weekly data shows a bigger than expected draw. SFOT knows little about Natgas in Henry hub but actions like this never cease to amaze him.

The back end of the oil curve is still well supported with strong buying in the middle of the barrel and he is not about to go against what seemed to be invisible hands to him. However, he does not see how this buying can last when inventories are still high and storage is still reported full everywhere. Look at Diesel stocks in the US for example. Inventories are building and the only outlet is Europe but at the moment, european tanks are full as well. China has reversed its diesel importing role from last year this time and has also turned exporters. With swelling stocks in the middle of the barrel and approaching seasonal low demand, SFOT is very tempted to sell middle distillate cracks in the summer period on an outright basis.

In the physical market, China has been trying to sell its excess crude cargos back to the market for a while. Last year this time, they did the same but it was due to turnarounds and refineries were not able to process the crude. However, this time round, it is lower demand for products in China that has led them to turnaround and sell crude back. This, together with the fact that runs are getting cut everywhere, we shall see more crude available in the market. Time spreads in crude shall weaken further. and SFOT shall sell spreads on strength.