Algo flows favor Brent buying – TDS
Quant funds are driving near-term crude price moves, with CTA buying and WTI short covering likely to fuel continued upside in Brent despite minimal disruption from recent Russian sanctions, TDS' Senior Commodity Strategist Daniel Ghali notes.

Quant funds are driving near-term crude price moves, with CTA buying and WTI short covering likely to fuel continued upside in Brent despite minimal disruption from recent Russian sanctions, TDS' Senior Commodity Strategist Daniel Ghali notes.

CTAs building net long in crude

"The set-up for algo flows remains tilted towards subsequent buying activity over the coming sessions, even as CTAs begin to build a net long position in Brent crude this session."

"Even in a flat tape over the coming week, CTAs will be forced to continue covering WTI shorts over the coming sessions, whereas continued upside in prices following the latest Russian sanctions package could fuel continued large-scale buying totaling nearly +30% of algos' max size."

"We ultimately expect minimal disruptions from the recent wave of sanctions, but in the imminent-term quant fund shorts will drive price action over the coming sessions."

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