Total pessimism
For the week from 27 July to 2 August, before the current rebound in oil prices to $45 per barrel, hedge funds increased bets on lower prices of Brent oil 36 thousand 727 contracts, announced today the London exchange ICE Futures Europe. This is a record weekly increase short positions of speculators in Brent crude since 2011, when ICE began to publish these statistics, follows from the data Bloomberg terminal. The previous record week of growth “short” on oil prices the speculators put in November 2015 — 27.7 thousand contracts.
A sharp jump in rates to reduce the price of Brent over the past reporting week brought the total number of short positions on oil on ICE to 125.43 million, bringing it to a historical maximum (157,40 thousand) which was recorded in September 2014, when Brent crude still cost about $95.
Previously, the Commission on trade in commodity futures United States reported that the short positions of hedge funds in futures and options on us benchmark WTI for the same week (July 27—August 2) reached a record high in 218,623 thousand
The total volume of bets on cheaper Brent and WTI (the number of short positions on futures/options on WTI on the new York Mercantile exchange (NYMEX) and the ICE exchange as well as futures/options on Brent on ICE) at the end of the reporting week reached 374 thousand (equivalent to 374 million barrels). — maximum mid-January of this year. Since may, when this figure stood at 104 million barrels., he jumped more than threefold. The number of long positions during this time almost has not changed and now is 714 million barrels.
Bearish cycle
The price began to fall in the second half of last month, and in late July, both oil benchmark (WTI and Brent) came back to the “bear” cycle (quotations fell by 20% relative to the previous June peak). However, oil supplies from a number of countries, including the United States and Venezuela, are starting to decline, more cold winters can increase demand for raw materials compared to last year, and the excess bearish positions for long will be able to keep the prices down, the head of hedge Fund Astenbeck Capital Management LLC Andy Hall, whose letter to investors last week, quoting Bloomberg. “The market is moving by inertia, and now the movement is directed downwards, writes Hall. But extreme positions and improvement of fundamental factors can ultimately lead to potentially at any time — to a sharp rebound.” 2 August oil prices really jumped nearly 9%, the October Brent contract is traded at the level of $45.7 per barrel. Price increase helps the statement by the OPEC President that the cartel is constantly discussed measures to stabilize the oil market and in late September will hold an informal meeting.
With Hall of Astenbeck Capital does not agree experts Morgan Stanley, which expect reduction of prices on oil in the short term. “Despite the recent rebound, we see the possibility of lower prices in the next 1-3 months”, — wrote in the review of Bank analysts (quoted by Bloomberg). According to their forecast, during this time, the quotes may fall to $35 per barrel or even $30 when “fundamental changes” such as the resumption of supplies from Libya, and amid macroeconomic uncertainty.
