Is there a seasonal pattern to oil prices? It is beginning to look that way, though statistical purests would object to a sample size of two. Over the past couple of years, the switch between “reflation” and anti-“reflation” has taken on a little too much familiarity in terms of time and timing.

In the summer months between June and November 2016, oil was met with substantial volatility that interrupted its first rise off the absolute lows. That flipped to rising oil prices on much less volatility consistent with “reflation.” It lasted past the end of 2016 and into most of the first two months of 2017.

Then, starting February 24, back to volatility and the wrong trend again. The amount of time spent in that state was just about the same as the year before. Around October 2017, WTI broke to new multi-year highs and kept going all the way until January 26 – and the outbreak of those relatively minor global liquidations.

If we line them up at the respective peak of each one, it’s not a perfect relationship by any means but there is enough of a rough outline for possible seasonality (if we assume the difference in WTI “reflation” intensity at the end of 2017 was the purge of contango from the futures curve).

The timing is a bit off, but we might suspect the imprints of China’s Golden Weeks in all those inflections. Hoarding “dollars” between them (starting toward September) and placing those in the oil market? That’s perhaps a little too speculative at this juncture.

Whatever the case, oil prices as “reflation” (as inflation hysteria in some large part derived from WTI) have taken a break since that point in January, just as they did at the end of last February.

One of the most striking aspects of WTI’s most recent rise was the extreme positions on both sides of the futures market. Money managers, who had until 2017 pretty much determined the price of crude on their positioning alone, both last year and this year put on record long positions.

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