KBC Market Research Desk
KBC Bank
Crude
The oil price fell back below 65 USD/bbl yesterday. Comments of Saudi oil officials regarding the kingdom’s high crude oil production may have weighed on the market; Saudi’s deputy oil minister said that high production reflects strong demand for Saudi’s oil. Moreover, oil minister Naimi added that if it was necessary, Saudi’s would be able to meet additional demand from China.
An interesting piece of data was released by the InterContinental Exchange yesterday. A so called Commitment of Traders report showed that money managers’ bets on further increase in oil prices hit yet-another record last week - net position in Brent futures reached about 270 thousand contracts (one contract represents 1000 barrels of oil). Quite interestingly, the increase stemmed rather from a decline in short positions as long positions fell as well (vis-à-vis the previous week). On the other hand, unlike the week before, the report unveiled that the decline in the shorts came hand in hand with fall in number of traders betting on the price decline. In other words, the report suggests that the market mood may have changed more significantly than the “headline” figure (i.e., change in net position) could suggest.
As for the rest of this week, markets will look out for tomorrow’s eye-catchers – the FOMC meeting, US GDP estimates for the first quarter and, last but not least, data on crude inventories. Regarding the latter, market expectations are for a relatively small build in crude stocks (about 1.3 million barrels). As usual, an API report that is to be released later today will give a hint about the official EIA figures scheduled for Wednesday’s afternoon.
Chart of the day:
Money managers’ net position in Brent futures hit yet-another record high last week. Unlike the previous report, the data showed a significant decline in number of traders betting on a price decline.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
Recommended Content
Editors’ Picks
AUD/USD failed just ahead of the 200-day SMA
Finally, AUD/USD managed to break above the 0.6500 barrier on Wednesday, extending the weekly recovery, although its advance faltered just ahead of the 0.6530 region, where the key 200-day SMA sits.
EUR/USD met some decent resistance above 1.0700
EUR/USD remained unable to gather extra upside traction and surpass the 1.0700 hurdle in a convincing fashion on Wednesday, instead giving away part of the weekly gains against the backdrop of a decent bounce in the Dollar.
Gold keeps consolidating ahead of US first-tier figures
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Bitcoin price could be primed for correction as bearish activity grows near $66K area
Bitcoin (BTC) price managed to maintain a northbound trajectory after the April 20 halving, despite bold assertions by analysts that the event would be a “sell the news” situation. However, after four days of strength, the tables could be turning as a dark cloud now hovers above BTC price.
Bank of Japan's predicament: The BOJ is trapped
In this special edition of TradeGATEHub Live Trading, we're joined by guest speaker Tavi @TaviCosta, who shares his insights on the Bank of Japan's current predicament, stating, 'The BOJ is Trapped.'