MBCC Trading Highlights 30th November'22 - Now we enter winter, Commodities are about seasons as well as macro!

When people trade Commodities, they forget that Commodities do play an actual role in the seasonal requirements of an economy, after all they are more than just financial speculative assets in a cross asset portfolio. It is important to NEVER underestimate the seasonal trends of a Commodity, especially Oil.

This has been one of our biggest calls during summer when we looked at gasoline and lower demand, then the Distillate/diesel and exports from China angle that was not picked up by any one. It is important to see what is going on underneath the barrel, i.e. Crude Oil is just an input for a host of important products. As we move from season to season, the demand supply changes and physical market flows change, but of course, equity analysts do not look nor get this aspect. It is ALL connected.

Now as we move into the Norther Winter Hemisphere, what is MBCC take on Brent here? Where is the opportunity in the curve, long the spread? Short it? Is it better to be in the actual Commodity or the Equity? What are our cross asset demand models telling us now and how to be positioned?

Our aim is to move money around, long or short across Equities, Commodities or Bonds, looking at physical market dislocations, i.e. the Commodity market always leads the Equities, not the other way around! Isn't it better to capture 10-15% rotating capital from one asset to the other and growing your portfolio than being stuck in one stale position?

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