Speculators In Oil Keep Getting It Wrong

At the end of last November, I wrote about my skepticism around OPEC’s ability to control oil prices. I was commenting that I didn’t understand what the speculators could possibly be thinking as the cost of extracting American oil was coming down and fast as US stocks continued to grow. Today, I read on Reuters that the oil price is falling with WTI near a 6-month low as ‘mounting concerns about global oversupply wiped out price gains since OPEC sealed a landmark accord to cut output‘. Once again, I have to ask myself what are people thinking? I would like to see higher oil prices – higher commodity prices in general in fact – but we are going to have to wait a bit longer. Meanwhile, I am in good company it would appear as Reuter’s write John Kemp observes that hedge funds are losing faith in OPEC’s ability to deliver telling us ‘Hedge funds and other money managers cut their combined net long position in the three main futures and options contracts linked to Brent and WTI by 139 million barrels in the week to April 25. The reduction was one of the largest weekly falls on record, and
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Speculators In Oil Keep Getting It Wrong. This article appeared first on CTRM Center.