Goldman Sachs’ energy analysts are the latest to warn of the unprecedented inflows into oil ETFs in their most recent research note. In fact they attribute the small spike in oil prices in the last few weeks largely to this, a US cold snap, storage demand for products, fuel switching and a spike in refining margins.
Most interestingly, however, the Goldman oil bulls believe the spike is only transient as most of these factors are likely to reverse in the near term, hence they do not believe it represents the impending end to the current bear market (which they are still expecting before the end of the year).
The above certainly fits their view that the new bullish cycle will only reappear when the contango flattens out, in itself only likely to happen when most spare production (most likely from non-Opec producers) is brought offline.
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