Crude Starts The Week Lower, Demand Outlook Remains Major Concern

Oil prices rose sharply on Friday by around 2.5% to end a week characterised by demand fears. The rally was driven by generally better risk sentiment. Despite the rise, oil ended the final week of April down about 1.5%. The USD index was 0.2% higher. Crude has started the APAC session lower though, with WTI down 0.5% to $76.30/bbl and Brent -0.7% to $79.84, below $80 again.

• WTI remains well below short-term resistance at $79.18, the April 24 high, and Brent well off $82.88. WTI is holding just above its 50-day simple moving average but below the 100-day.
• Bloomberg reported that net longs in US diesel have fallen to their lowest and there is now a net short position in ICE gasoil – both are their most bearish in over two years. Net longs in gasoline fell to a 3 week low while crude fell for the first time in a month. Asian refiners have been considering reducing output as their margins are being squeezed. Demand concerns are weighing strongly on the market.