RE:RE:Short squeeze inevitable In the futures market, shorts are closing out and longs are gaining. There is a supply deficit building while oil traders are busily worried about recessions and interest rates and blowing down storage, both on water and land. We are in a phase where the dominant narrative is bearish and fundamentals don't matter - until they do.
The simple answer is traders will continue the financial game until the very last second because that is what they do. This is the dichotomy of the financial and the physical markets in oil. The big money is in financial - its 30X larger than the physical market - but it only works if there is a compliant physical market. A structural deficit of 2.5 mm bbl in August leaves the oil trade very vulnerable to any unforseen events.
While qthe physical market projects a tightening in 2H/23, the usual jiggery-pokery in financial oil portends the price of oil going over $100 if somebody stumbles.
All in all, its looking good for high beta oil names like GXE.