Crude Oil Lower; Speculators Cut Longs on Covid Woes

imageCommodities6 hours ago (Jul 26, 2021 15:16)

© Reuters.

By Peter Nurse — Crude oil prices edged lower Monday as concerns over the rising number of Covid-19 cases globally weigh on sentiment surrounding fuel demand outlook.

By 10 AM ET (1400 GMT), U.S. crude futures traded 0.3% lower at $71.86 a barrel, while the Brent contract fell 0.1% to $73.35.

U.S. Gasoline RBOB Futures were up 0.1% at $2.2640 a gallon.

New Covid-19 cases have been rising in Asia for a few weeks now, but sentiment in the oil market is starting to deteriorate as infections rise in the heavy energy-consuming countries of the west.

The United States will not lift any existing travel restrictions “at this point” due to concerns over the highly transmissible Covid-19 Delta variant and the rising number of U.S. coronavirus cases, Reuters reported Monday, citing a White House official.

Additionally, in Europe, German Chancellor Angela Merkel’s chief of staff said on Sunday he fears the number of new coronavirus cases could soar to 100,000 a day in two months or so, while the French parliament on Monday approved a bill requiring the public to obtain a health pass through vaccination in order to enter a number of social venues.

“Any significant reversal of easing in restrictions in parts of Europe and the US would send a fairly bearish signal to the market, particularly when you consider the higher vaccination rates in those regions,” said analysts at ING, in a note.

Concerns that this increase in cases will result in a slower recovery in the services sector prompted Goldman Sachs (NYSE:GS) to cut its U.S. economic growth forecast for the remainder of the year on Monday. The influential bank dropped its growth forecast for both of the final two quarters of the year by 1 percentage point each, to 8.5% and 5.0% respectively.

Also of interest is the latest position data, with speculators reducing their net long positions in both the ICE (NYSE:ICE) Brent and NYMEX WTI contracts over the last reporting week. 

They cut their net long positions in ICE Brent by 50,786 lots to leave them with a net long of 261,841 lots, the smallest position since late May. The move was even larger for WTI, with speculators reducing their net long by 64,702 lots, leaving them with a net long of 316,789 lots, the smallest position speculators have held since November last year.

Crude Oil Lower; Speculators Cut Longs on Covid Woes

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.


Please enter your comment!
Please enter your name here