We shall dive deep into the latest reports from the CFTC and ICE on how traders are committed to oil on Wednesday. For now, it is imperative to point out the obvious. The Israel-Iran acrimony has spurred financial investors to migrate back to the European crude oil benchmark.
Oil prices have once again become defensively bid as another weekend approaches. Those that have taken to the buyside of the market can hardly be blamed for not wanting to come in Monday morning with an unspeakable incident having occurred without any sort of upside cover. Reluctant or not, net-long positioning has once again inflated and using MifID data, Bloomberg report the sharpest increase since 2018 from funds and their like.
Paradoxically, the recent, seemingly encouraging, performance of the oil market has shown just how worrying prospects are going forward. Prices are still around $7/bbl higher than at the beginning of October, but the weakness of the last two days demonstrated that in the absence of an actual supply disruption, nothing could provide prolonged price support.
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