Hedge Funds Shun WTI While Brent Hits 12-Week High

Paterniano Del Favero
Agosto 21, 2017

In a sign that investors are more optimistic on a rise in Brent prices, data show that hedge fund managers lowered their net long position on WTI by 2 percent to 274,441 futures and options in the week that ended on August 15, according to data by the U.S. Commodity Futures Trading Commission quoted by Bloomberg.

Brent crude futures, LCOc1 the worldwide benchmark for oil prices, were at $52.64 per barrel at 0639 GMT, down 8 cents, or 0.2 percent, from their last close.

Brent prices reached a 12-week high on Friday, while WTI Crude prices-although surging on the latest drop in the USA rig count-were not touching week-highs, suppressed by rising US crude output.

The moves follow a sharp 3 percent jump in prices on Friday.

However, output from the USA was still on the rise, having broken through 9.5m barrels per day (bpd), the highest level since July 2015.

"Falling stocks in the USA contrast with rising production in the US and Libya, where production at the Sharara oil field [in Libya] is now back to normal", said Carsten Fritsch, a Frankfurt-based analyst at Commerzbank, in a note.

But there are indicators that USA output may soon slow, as energy firms cut rigs drilling for new oil for a second week in three, the Baker Hughes energy services firm reported on Friday.

Data on Wednesday showed US crude inventories posted the largest weekly decline in 11 months, but also showed domestic production was the highest in more than two years.

Analysts said that falling crude inventories, despite rising output, indicate the market is already tightening.

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