Oil prices with massive weekly losses – Commerzbank
Oil prices slumped in the past trading week, Commerzbank’s Commodity Analyst Carsten Fritsch notes.
Oil prices fall sharply
“Brent fell to $70.6 per barrel on Friday, its lowest level since March 2023, and closed at its lowest level since December 2021. WTI hit a 14-month low of $67.2. Brent lost almost 10% week-on-week, with the decline exacerbated by the contract rollover at the turn of the month. When excluding this factor, the drop amounts to 7.6%, which is the sharpest weekly decline since October 2023.”
“The weekly loss for WTI was 8%, which was also last seen around 11 months ago. The time spreads, i.e. the price differentials along the forward curves, also narrowed noticeably, although the narrowing was much more pronounced for Brent. On Friday, there were only 35 US cents between the first two Brent forward contracts and less than $1 between the nearest contract and the contract expiring six months later.”
“The premiums for oil with short-term delivery have never been lower this year. Market participants are therefore much more relaxed about the oil market than they were just a few weeks ago. This is also reflected in the behavior of speculative financial investors, who significantly reduced their net long positions in Brent and WTI in the week ending September 3. According to ICE and CFTC data, these fell combined to their lowest level this year in the last reporting week.”
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FXStreet Insights Team
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