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Oil speculators continue to head for the exits

Published Wednesday, August 27th, 2014

Egyptian and UAE air strikes on Tripoli and the Iranians supplying weapons directly to the Kurds. Just two more developments in a volatile and fluid Middle Eastern and North African situation. Muslim extremism is creating all sorts of surprising actions and alliances.

It is all taking place in the world’s largest oil producing region but there has been no new supply interruption and Libyan production has actually trebled. Hence the latest figures on money managers’ net speculative length (NSL) in WTI and Brent show a continuation of the pattern that has become all too familiar. In the week to August 19 both contracts suffered substantial withdrawals. WTI NSL fell by 34,000 contracts (14%) and Brent by 9,000 (12%).

Brent NSL is at its lowest level since July 2012 and has fallen by 179,000 lots (74%) in the last eight weeks which is the fastest fall on record, during which time Brent has fallen from $114.46/bbl to $101.56/bbl. WTI NSL has fallen by 49% over the last nine weeks matched by a price move of $11.88/bbl. If the motto of forensic auditors is follow the money the motto of oil price auditors should be follow the speculative length.

to read the rest of the report, please click here 

Posted by David Hufton