Oil: Spec Market is Long Crude – Westpac
Robert Rennie, Research Analyst at Westpac, notes that the West Texas
front month crude oil traded above $44/bbl last week for the first time
since Nov 2015.
Key Quotes
“That’s
despite ‘no deal’ at Doha, US crude inventories rising by another 2mb
and the Kuwait strike ending. Clearly, that tells you that the crude
bulls are in command and our sense here is that this story still has
further to run.
The speculative market is very long. Indeed, the
last time the market was this long was back in June when crude was
trading >$100. Now this could be a factor that might limit gains
here, or it could also be a sign that specs are now fully embracing
higher prices. Time will tell. However, price action last week favours
the latter rather than former argument.”
