Many markets turned yesterday but oil didn't and that may have the crude bulls jumping ship. Oil is set to close April lower despite a shock OPEC+ production cut of 1.66 million barrels at the start of the month. Not only that, but it's down in six straight months and 10 of the past 11.
But before oil bulls declare Mayday, they might want to look at the calendar. April is ending and May is the best single month for oil in the past 20 years, averaging gains of nearly 5%.
Now some of that is skewed by the 88% rally in 2020 coming off the covid low but there have been gains in three straight years. June is also a strong month as the summer driving season heats up.
Note too that the oil curbs from OPEC+ don't take place until May so the physical market hasn't seen the squeeze yet. With driving set to pickup, China improving and flying set to jump this summer.
"We are close to what you’d call a bottom based on fundamentals," said notorious oil bear and Citi head of commodities Ed Morse today on CNBC.
Here's what American Airlines said on the summer flying season:
"Revenue intakes in the past months are well ahead of the same booking period in 2019, including robust international bookings as customers return to long-haul international travel this summer."
"we remain encouraged by the demand environment that's out there. We see strong bookings strength really across the airline network International, of course, long-haul international is seeing a lot more bookings come in a lot sooner, really reflecting the pent-up demand that's been there in many markets they really haven't been open for the better part of 4 years."
"This summer in long haul is going to be a seasonally -- and probably historically strong long-haul summer."
