Oil Prices Drop as Speculators Trim Positions

Oil prices saw a significant drop on Friday, with ICE settling 2.68% lower and WTI briefly trading below US$70/bbl for the first time this year. The recent weakness in prices is attributed to uncertainty surrounding OPEC+ supply levels. The group is set to gradually increase supply from April, but there are talks of a potential delay.

If the supply increase is delayed, it could tighten the oil market further, which may not sit well with President Trump. Speculators are reacting to this uncertainty by cutting positions in ICE Brent, with a net long of 265,223 lots as of last Tuesday. On the other hand, middle distillates like gasoil are seeing better support in the market.

In the agriculture sector, cocoa prices fell over 7.6% on Friday, raising concerns about demand destruction. However, prices remain historically high, leading to expectations of continued volatility in the market. Money managers have trimmed their net short position in cocoa, while managing money net longs rose for corn.

In conclusion, the oil market is facing uncertainty due to potential delays in supply increases by OPEC+. Speculators are reacting by adjusting their positions, while the agriculture sector is grappling with volatile cocoa prices. Investors should monitor these developments closely to make informed decisions about their portfolios.