Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Oil Traders Cut Longs As OPEC Meet Looms

By TickmillCommoditiesDec 02, 2021 05:09AM ET
www.investing.com/analysis/oil-traders-cut-longs-as-opec-meet-looms-200610211
Oil Traders Cut Longs As OPEC Meet Looms
By Tickmill   |  Dec 02, 2021 05:09AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

The latest CFTC COT institutional positioning report shows that oil traders cut their net long positions again last week, with the total upside position now sitting around one-year lows. The sell-off came amidst the ongoing uptick in the US dollar and renewed fears around COVID as a result of the identification of a new variant, Omicron.

OPEC In Focus

Oil prices are now sitting down by more than 20% from the highs printed in October. Given the sell-off, there is a high level of speculation around how OPEC will react. Recently, in response to the US continuing to release oil from the government’s SPR, OPEC had warned that it might look to cut back on production levels in a bid to boost oil prices. Given the heavy sell-off over the last week as Omicron fears have taken hold, the market is now expecting such an announcement from the meetings, which are taking place later today.

Omicron Impact

Along with the decision on oil production levels, the market will also be keen to hear the group’s latest outlook regarding the new variant. Oil prices came under immediate, and heavy selling pressure as news of the variant first broke, echoing the early days of the pandemic last year. While the broader market response appears to have calmed down for now, as we await further details on the severity of the strain, oil prices remain under pressure. At the very least, the immediate disruption to travel (new airline restrictions announced globally and the expectation of lower demand over the holiday season from the aviation sector, means that oil is likely to remain pressured near term.

EIA Reports Crude Inventories Draw

There was some good news for crude bulls this week, however. The EIA reported that US commercial crude inventories were lower by almost a million barrels last week, following the unexpected surplus of the prior week. However, the decline was a little less than forecast and was accompanied by news that both gasoline and distillate stockpiles were higher over the week, reflecting a drop in demand.

Technical Views

The reversal lower from the failure at 83.75 level has seen the market breaking down through several vital levels and the bull channel low. The price is currently sitting on the 65.52 level support. However, with both MACD and RSI firmly bearish here, the focus is on continuing lower towards the 60.55 level next.

Oil daily price chart.
Oil daily price chart.

Oil Traders Cut Longs As OPEC Meet Looms
 

Related Articles

Andrew Lane
3 Scenarios For Gold And Silver In 2022 By Andrew Lane - Jan 17, 2022 1

With the markets already starting to react to the Fed’s tapering and interest rake hike policies for 2022, we believe the markets are setting up for three possible scenarios, which...

Oil Traders Cut Longs As OPEC Meet Looms

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email