Money Managers’ Positions in Brent and WTI Crude Futures
It was a risk-off week in the global crude benchmarks as money managers reduced long positions and added short positions. Preceded by five consecutive weeks of increases, long positions declined by 46.9mb (-8%). Meanwhile, short positions increased by 12mb (+8%). As a result, net positioning fell by 59.0mb (-13.8%), the largest rate in two months, while the long:short ratio fell from 4.03:1.00 to 3.41:1.00. The rate of sales was fuelled by the reversal of sentiment in WTI futures following the expiry of the Aug’24 contract. Global crude oil flat prices came off last week, with Brent crucially finding support at the $80/bbl level.
In the face of macroeconomic headwinds and a stronger dollar, the market is struggling to find a meaningful and sustainable bullish story to drive flat price higher. Despite increasingly aggressive rhetoric by belligerents in the Middle East, traders have become immune to such headlines, instead taking stock of the deteriorating demand sentiment. The market is not quite inspired by the People’s Bank of China (PBoC)’s stimulus measures, while mixed US economic data are not allaying recession fears.
