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.
“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.”