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OIL: Oil Reverts on Monday in Return to Bearish Themes

OIL
BulletEnergy BulletsCommodities

Oil has reverted to a sharp selloff Monday as China stimulus optimism in earlier trading and Middle East escalations failed to hold support.

  • Brent NOV 24 down -1.7% at 73.24$/bbl
  • WTI NOV 24 down -1.9% at 69.63$/bbl
  • Oil prices faced a strong bearish trend through Aug/Sep over China demand fears and the expectation of OPEC+ to bring barrels back to the market towards the end of next year.
  • The most recent sell-off has likely been exacerbated by a move through Thur/Fri lows.
  • Markets continue to see weakness from an energy standpoint out of China as Q4 oil product export quotas are set to cap volumes.
  • Weak export margins are driving  Chinese refiners to prioritise domestic sales over exports.
  • China is also reported to be raising taxes on fuel oil imports in a blow for independent refiners already facing sluggish margins.
  • Money managers raised net long crude positions slightly last week from the record low the previous week, but Brent still maintains a small net short position.
  • Funds increased ICE Gasoil and Nymex diesel net short positioning again with both now showing the most bearish on record.
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Oil has reverted to a sharp selloff Monday as China stimulus optimism in earlier trading and Middle East escalations failed to hold support.

  • Brent NOV 24 down -1.7% at 73.24$/bbl
  • WTI NOV 24 down -1.9% at 69.63$/bbl
  • Oil prices faced a strong bearish trend through Aug/Sep over China demand fears and the expectation of OPEC+ to bring barrels back to the market towards the end of next year.
  • The most recent sell-off has likely been exacerbated by a move through Thur/Fri lows.
  • Markets continue to see weakness from an energy standpoint out of China as Q4 oil product export quotas are set to cap volumes.
  • Weak export margins are driving  Chinese refiners to prioritise domestic sales over exports.
  • China is also reported to be raising taxes on fuel oil imports in a blow for independent refiners already facing sluggish margins.
  • Money managers raised net long crude positions slightly last week from the record low the previous week, but Brent still maintains a small net short position.
  • Funds increased ICE Gasoil and Nymex diesel net short positioning again with both now showing the most bearish on record.