Oil prices rose Monday morning, supported by comments of the Saudi oil minister regarding expectations of continued cooperation among oil producing nations beyond 2018. Following a four-week streak of gains, that accumulated to almost 11% for Brent and 13% for WTI, benchmarks declined by 1.8% and 1.45% respectively last week as US output bounced back. By 08.37 Am GMT Brent crude had gained 0.31% to trade at $68.82/bbl, while at the same time WTI stood at $63.63/bbl, 0.41% up from last week’s close.
US producers saw their fleet of active rigs shrink by five units last week. The development seems against the general expectation of a sharp ramp up in upstream operations, monetizing on higher crude oil prices. Rigs in the US now stand at 747 active units, from 515 a year ago.
Speculators mounted their net long position by more than 44.5 million bbls last week, according to CFTC data. Longs soared through new record levels at 517.82 million bbls, lifted by 44.72 million bbls w-o-w, while shorts saw little change.
Producers deepened their net short position by 7.86 million bbls last week, to a total of 16.8 million bbls. Crude oil output recovered to 9.75 million bpd, according to the latest EIA data, following a dip to below 9.5 million bpd the week prior. With slowing refinery activity, on the back of the upcoming maintenance season, and continued gains in production, US stocks may start rising soon, following multiple weekly declines.
The Oil Research Team
Supply Chain & Commodities Research