Oil prices opened the week with small gains, following steep declines last week largely on the back of a trade war waged from the US to China. By 08.30 AM BST, Brent crude was trading at $67.38/bbl, up by 0.4% from the previous close, while at the same time WTI stood at $62.24/bbl, 0.29% up.
Latest data from Baker Hughes showed that drillers made a strong return last week, with the addition of 11 drilling rigs, following the removal of seven units the week prior. The active fleet of drilling rigs rose to 808 units, with five additions in Oklahoma, three additions in New Mexico and two additions in Texas. The fleet of rigs in the US has now reached levels last seen in March 2015 and is likely to continue rising on the back of consolidating oil prices at current levels.
Crude markers were also weighed down by a shift in the positioning of money managers last week. Speculators trimmed their cumulative net position by almost 44 million bbls, as they seem to expect that the trade war between the US and China may have a significant impact on the oil market. Shorts were seen up by seven million bbls last week to 375.7 million bbls, while longs were slashed by 36.7 million bbls, to 461.8 million bbls.
Producers kept their net positioning near previous levels, trimming only 1.54 million bbls. However, shorts were pushed up by more than 20 million bbls to 621.5 million bbls, while longs rose 18.7 million bbls, to 589.6 million bbls. The net short position of producers remains thin at only 32 million bbls.
The Oil Research Team, EMEA
Supply Chain & Commodities Research