The Brent oil price experienced a significant increase of more than 3% to reach $82.4 per barrel at the beginning of the week, marking the strongest daily gain of the year. Commerzbank’s commodity analyst Carsten Fritsch highlighted this notable surge in price.
Key Highlights:
- The price of Brent has surged by almost 8% in the last five trading days.
- Price has returned to levels last seen in July after a brief dip to a 7-month low of $75 in early August.
- Net long positions in Brent hit a record low of 13.9 thousand contracts, the lowest level since January 2011.
- Speculative financial investors have reduced their positions significantly, with a total decline of 183.5 thousand contracts.
- WTI net long positions also decreased but not as drastically as Brent.
- Gasoil reported net short positions for the first time since June 2023, indicating a correction in previously held net long positions.
Analysis and Outlook:
The recent surge in Brent oil price and the record low net long positions suggest a shift in market sentiment. The correction in speculative positions indicates a potential reversal in the downward trend observed earlier. Investors should closely monitor these developments as they could impact future price movements and trading strategies.