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  
Yuan firms on trade talk hopes

A sense of stability returned to financial markets on Tuesday as investors swept aside geopolitical risk factors to focus on progress in trade talks between...

U.S. stocks on track for worst December

December has so far been one of the worst year-ends for global investors in recent history. The S&P 500 has fallen 4.6% from the beginning of the month...

What outcome to expect to from Vienna

A few months ago, some investors speculated that Oil prices could reach $100 per barrel in 2018. Sanctions on Iran, shortages in supplies, strong demand...


Trade truce provides boost to risk

Just a few days after Fed Chairman Jerome Powell unexpectedly signaled that the Federal Reserve is turning dovish, investors received further positive news...

Risk assets rally on Powell Put

Investors were all ears for yesterday's speech from Federal Reserve Chairman Jerome Powell at the Economic Club of New York. A couple of keywords...

Brexit to dominate the headlines

Two months ago, U.S. equity investors cheered a new all-time high on the S&P 500. Stocks advancing to new record numbers started looking as a normal...


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...


In the past 24 hours Bitcoin has lost -4.89% and reached $3311.64664253. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -0.0395% and is now at $1.1371. Start trading and making money on Forex today.

In the past 7 days Ethereum has lost -6.06% and is now at $86.4705485281. 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
1easyMarketseasyMarkets92%
2FXTMFXTM88%
3HYCMHYCM87%
4Alfa-ForexAlfa-Forex86%
5FxProFxPro85%
6FIBO GroupFIBO Group84%
7OctaFXOctaFX83%
8HotForexHotForex82%
9AvaTradeAvaTrade80%
10FXCMFXCM78%
  


Share: