By Srinivas Chowdary Sunkara // petrobazaar // 11th August, 2020.
Brent oil prices for Oct settlement rose 59 cents or 1.33 pct to close at $44.99 a barrel on London based ICE futures Europe exchange and WTI oil Sep futures climbed 72 cents or 1.75 % to settle at $41.94 a barrel on NYMEX last night. In Shanghai, Crude oil main contract futures rose by 1.7 Yuan or 0.6% to close at 284.3 Yuan/barrel while MCX crude oil current month futures settled Rs.64 up at Rs.3159 a barrel yesterday. Brent traded at a premium of $3.05 over WTI during the session.
The world crude oil price indexes demonstrated upward trend yesterday. Chinese positive factories data that signs of rise in demand and hopes for an agreement in the U.S on more stimulus aid, Supported oil complex. The resurgence in infections remains the main headwind that keep lid on oil prices. On the supply side, OPEC+ supply rose by 1Mbpd in July as KSA and other key members ended their voluntary extra curbs on top of OPEC agreed curbs. Iraq agreed to make extra cuts of 400,000 bpd in August to compensate for its over production over the past period under cut deal, That gives the market signals from different directions. The U.S drillers took out another 4 rigs from the operations to keep rig numbers at 247. It seems that the U.S drillers are not ready to resume their operations until and uncless WTI price reach $50.
On the Technical front, John Kept says that the Hedge funds' oil trading largely dried up last week due to normal summer holiday slowdown was compounded by an absence price or fundamental direction of the market. Portfolio managers have left their over all position little changed since the end of June. There has been a marginal shift from holding positions in crude to products such as diesel and gas oil. Fund managers are also hampered by the lack of strong signals about the market's future direction coming from prices, positioning or fundamentals.
Today Morning, Asian markets opened with gap up, continuing yesterday's upside momentum. On the data side, EIA will release short term energy outlook today followed by API weekly predictions. Monthly reports are also due this week. We may see some volatility in the short term. Good day to all.
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