Commodity Trade Mantra

Posts Tagged ‘Oil Traders’

These Fundamentals Point To Higher Oil Prices

Investors overlooked the bearish news of crude stocks that still remain at all-time highs, because of another more interesting development. Gasoline stocks have declined rather significantly in recent weeks, at a much faster rate than at this point in the 2016 season as demand is rising. That, along with a few more reasons, makes one surely feel optimistic about oil prices.

Oil Markets On A Knife Edge Despite 91% OPEC Compliance

The 10 OPEC countries that promised to reduce their production as part of the Nov. 30 deal have achieved a 91% compliance rate with the targeted cuts. Oil prices enjoyed a huge surge following the successful outcome of the OPEC deal at the end of 2016, but have stagnated since. If OPEC compliance starts to drop, it will probably do so with a backdrop of rising U.S. oil production.

Is Putin’s Support For An OPEC Freeze A Game Changer for Crude?

The array of comments from OPEC and Russian officials over the past week could signal that a real effort might be underway to reach a deal on freezing production. Iraq would support a deal; Iran will attend the meeting & the potential for an OPEC deal received an endorsement from a surprising source – Russian President Vladimir Putin threw his weight behind a production freeze.

The Current Rally In Oil Prices Is Reaching Its Limits

Oil prices have climbed by about 50% from their February lows, topping $40 per barrel. But now, with oil traders taking the most bullish positions in months while the fundamentals still have not shifted in a correspondingly significant fashion, traders have set up the conditions where oil prices could snap back to the downside.

Why So Much Volatility In Oil Prices? Blame The Speculators

Much of the gain was related to speculative movements & decisions of oil traders moving barrels of oil on paper. Speculators had taken a near-record level of short positions on oil, predicting oil prices would continue to fall. They did fall, for about 2 months. However, with such a large preponderance of short positions, the timing was right for a correction.

The New Normal for Crude Oil?

With US shale being one of the main culprits of excess crude oil production, storage of crude in US markets have risen above seasonally adjusted highs in the last year. This abundance of stored crude has pushed the current spot price of crude oil toward five-year lows, as current demand is just not there to take on more crude production.

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