WTI crude is up $1.02 to $77.09 in the aftermath of the OPEC+ decision.
All the talk in the oil market is around omicron impacts, Libyan production offline and Chinese demand but technical factors could be in play this week.
Bloomberg writes today that the world’s two biggest commodities indexes -- the S&P GSCI Index and the Bloomberg Commodities Index -- both reset this month and that will put pressure on oil. That's because oil rose so much last year, so it's now an unrepresentative percentage of the index.
SocGen estimates the equivalent of $4.6B in selling and Citi sees $3.1B. That will occur during a five-day roll period, which begins on the fifth working day of the year (Friday). Oftentimes flows like that are frontrun. The rule of thumb in equity index rebalancing or additions is that the flows are all hedged or anticipated by the time something hits the index.
Ultimately, those flows will be easily absorbed by the market and oil will trade off physical supply/demand but if some near-term selling kicks off, that could be a catalyst.