Letter from Switzerland: Traditional indicators no longer tell oil’s story

With extreme weather, refinery closures and geopolitical uncertainty reshaping supply and demand, traders must look beyond headline price movements to understand the actual state of the market

The global oil market has entered a period of increasing volatility, with unpredictable supply, deceptive demand signals, and factors such as geopolitical uncertainty and souring economic sentiment all tugging at prices. Crude flat prices have been somewhat volatile but have, on the whole, suffered over the last month or two. Diesel spreads, which measure the physical need to either store barrels or release barrels from storage, have historically been a reliable indicator of broader market trends and of economic growth. Recent disruptions, however, suggest traders must look beyond even this proxy to understand the evolving landscape fully. What is more, the increasing complexity of supply ch