Energy companies, EOG Resources Chesapeake Energy to invest in various financial instruments — futures, swaps and options “Collard”, — putting on the cheaper U.S. benchmark WTI. So they use favorable price environment (mid-February WTI rose by more than 75%, rebounding from a yearly low of $28,47, at 19:30 GMT on 16 may, the benchmark was traded at the level $of 47.64) to insure themselves against falling prices. The number of bets made by them on cheaper WTI (open short positions) for the week ended may 10 rose 3.8%, reaching a peak in September 2011, follows from the data of the US Commission on commodity futures trading (CFTC), cited by Bloomberg.
“They are stepping up efforts to insure risks with the first jump in prices, — explained the Agency John Kilduff, a partner at new York investment company Again Capital LLC. — Oil producers are drawn to this segment because everyone is trying to survive in a recession”.
The number of bets on a rise in WTI (net long position) investment managers fell by 8.6%, to 216,521 thousand futures and options contracts during the reporting week. The rate eased for the second consecutive week after three weeks of growth.
“The rally lasted for several months, and now the main question — we are in the middle or coming to an end?”, — signed Evans.
Pessimism among the participants of the oil market are holding for the third week in a row — the maximum period from Feb. This is facilitated by the high level of oil reserves in the US — are 87-year high, and the factors limiting production of the forest fires in Canada and the militant attacks on objects of an oil infrastructure in Nigeria, occupying the first place in oil production among African countries.
In Western Canada forest fires raging close to major oil Sands deposits of Alberta. The fire forced tens of thousands of residents to flee their homes and caused a disruption in the supply of diluting materials required for pumping high-viscosity heavy oil through pipelines.
Due to natural disaster, Royal Dutch Shell, Exxon Mobil, Suncor Energy and other companies are scaling down their operations, bringing production in the region could fall by 1 million barrels/day.
In Nigeria because of militant attacks on objects of an oil infrastructure to foreign companies such as Shell and Chevron, had to evacuate staff and suspend operations at a number of facilities. Production in the country in April fell to a 20-year low, compounding the problems of the national economy, already affected by the downturn in the energy market, follows from the data Bloomberg.
Oil production in the U.S. fell to the lowest level since September 2014, according to the US Department of energy. Commercial oil inventories for the week ended may 6 fell for the first time in a month, while the volume of strategic oil reserves peaked in 1929
“Over several sessions, prices did not grow amid positive news is a negative factor, said Bloomberg Tim Evans, an analyst with energy sector industry information resource Citi Futures Perspective. — Market still looks relatively overbought”.
WTI crude oil rose 36% in March and April — the highest level since may–June 2009, follows from the data Bloomberg. Futures on the benchmark rose 2.3%, to $of 44.66 on the new York Mercantile exchange for the week, which left the CFTC report.