Sentiments turn bearish on oil

26 July, 2016

Oil prices on both sides of the Atlantic have fallen to 3-month low as bullish traders found little reasons to keep betting on higher prices. Brent has declined by more than 15% after posting a 2016 high last month at $52.86 and WTI lost 16%. When prices started to fall from their peaks it was first considered as correction, but investors are getting worried its becoming a trend.

In fact, short term fundamentals should get us worried as ongoing oversupply likely to keep dragging prices lower.

Gasoline stocks on the rise  

Although U.S. crude oil inventories dropped for 10 straight weeks according to EIA, gasoline stocks have been on the rise. Unfortunately, the U.S. summer driving season, long considered to be a major driver of the oil market wasn’t robust enough to boost gasoline consumption and as we get closer to refiners’ maintenance season, oil demand will fall further.

Drillers adding rig counts

U.S. rig count was up for the fourth consecutive increasing by 15 to 462 for the week of July 22, and taking the number of rigs by 58 since mid-May.  This signals that the U.S. production declines are getting closer to an end, which is another negative factor for oil prices.

Hedge funds betting on lower prices

Hedge funds and money managers have been turning bearish on oil most recently by taking profit from recent bullish positions and now they seem betting on lower prices by establishing new shorts. This clearly reflects how sentiments have changed from three months when bullish bets were at record high.

Technicals support the bearish outlook

Both benchmarks fell below their 100-days moving averages on Monday for the first time since March, this would likely add to the pressure as many traders view it as selling signal. However, I still consider a dip below $40 is a good opportunity to jump in if you’re a long term investor, with target above $50 until year end. 


Source link  
iPhone sales indicate economic growth?

The recovery in U.S. stocks from October's slump evaporated on Monday with the Dow Jones Industrial Average falling more than 600 points, while the Nasdaq...

Saudi comments at OPEC support Oil price

The initial headlines coming out of the OPEC meeting in Abu Dhabi that Saudi Arabia has committed itself to lower production output should be enough...

Risk assets boosted by divided Congress

Asian stocks followed Wall Street higher after U.S. mid-term elections produced a divided Congress on Wednesday. All major U.S. indices climbed more than...


Rand rallies on risk appetite

Financial markets are continuing their forward drive on the realization that investors were rightly positioned for the outcome of the mid-term elections in the United States.

Dollar looks sensitive before elections

The market positioning at time of writing further suggests that investors remain hesitant to take on risk just hours before the mid-term elections in the United...

Conflicting trade signals set the tone

The early part of trading for the week has already showed how sensitive emerging markets can react to newsflow around potential trade developments...


Stocks back in the red

President Trump's tweet on Thursday that he had a long and very good conversation with President Jinping of China didn't serve the markets for long...

October: A month to forget!

Global equity markets ended a scary October on a slightly brighter note following a rebound on Wall Street during the final two trading days of the month...

Stock markets going nuts

Wall Street experienced one of its wildest trading sessions on Monday. What seemed to be buying the dips, turned into selling the rallies. The session...


In the past 24 hours Bitcoin has gained 1.72% and reached $5641.22628282. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -1.1164% and is now at $1.13. Start trading and making money on Forex today.

In the past 7 days Ethereum has lost -15.15% and is now at $178.520519483. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Forex Market Analysis



Forex Currencies Forecasts



Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets90%
2FXTMFXTM87%
3HYCMHYCM86%
4Alfa-ForexAlfa-Forex85%
5FxProFxPro84%
6FIBO GroupFIBO Group83%
7OctaFXOctaFX82%
8HotForexHotForex80%
9FXCMFXCM78%
10AvaTradeAvaTrade76%
  


Share: