The Brent oil price rose by more than 3% to $82.4 per barrel at the start of the week. This was the strongest daily gain so far this year, Commerzbank’s commodity analyst Carsten Fritsch notes.
Brent net long positions at record low
“Within the last five trading days, the price of Brent has risen by almost 8%. The price is now trading back at the level seen at the end of July. The slump from the beginning of August to a 7-month low of $75 has thus proved to be a brief episode. This price slide was facilitated by a sharp fall in net long positions held by speculative financial investors.”
“These fell to 13.9 thousand contracts in the week ending August 6, the lowest level since the start of the data series in January 2011, according to the ICE. Most recently, net long positions fell for four consecutive weeks. The reduction in positions during this period amounted to 183.5 thousand contracts or 183.5 million barrels. The decline in speculative net long positions in WTI was not quite as excessive.”
“According to the CFTC, these fell to a 2-month low of 172.6 thousand contracts. In the case of gasoil, the ICE reported net short positions for the first time since June 2023. Here, too, there was a rapid reduction in the previously considerable net long positions within a few weeks. This confirms our view that the price decline at the beginning of last week was a temporary exaggeration that has since been corrected.”
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