Oil Steadies After Fund Exit Triggers Fifth Weekly DeclineBy
Money managers trim bullish WTI bets to lowest in 10 months
Rigs targeting crude in U.S. gain for a 23rd straight week
Oil steadied after a sell-off among hedge funds triggered crude’s fifth straight weekly loss amid concerns a stubborn global surplus isn’t going away any time soon.
Prices rose 0.9 percent in New York. Speculators cut their net-long position in U.S. benchmark futures to the lowest in 10 months last week, and in North Sea Brent to the lowest since January 2016, exchange data showed. JPMorgan Chase & Co. cut its price forecasts as inventories remain plentiful.
"We kind of hit bottom after this long drop," Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by telephone. "It makes sense that we’re either going to stabilize or be up a little unless some news comes out."
Oil has tumbled more than 20 percent from its peak, entering a bear market last week, on concerns that expanding global supply will undermine the impact of output cuts from the Organization of Petroleum Exporting Countries and partners including Russia. U.S. crude drillers added rigs for a 23rd straight week, the longest stretch in three decades, according to data released on Friday by Baker Hughes Inc.
WTI for August delivery rose 37 cents to settle at $43.38 in New York after climbing as much as 64 cents earlier. Prices are down about 10 percent this month.
Brent for August settlement climbed 29 cents to close at $45.83 a barrel on the London-based ICE Futures Europe exchange. Front-month prices lost 3.9 percent last week. The global benchmark crude traded at a premium of $2.45 to WTI.
Commodity Futures Trading Commission data on Friday showed money managers cut their net-bullish position on WTI to the lowest in 10 months during the week ended June 20 and boosted wagers on falling prices to the most since August. Data from ICE Futures Europe on Monday showed that speculators cut their net-long position in Brent by 19 percent to the lowest in 17 months.
“There is scope for oil markets to tighten over the rest of the year,” Kerry Craig, global markets strategist for JPMorgan Asset Management, said in a Bloomberg television interview. “As those prices stay weak, certainly some of those companies start adjusting their outlook for capex and investment, and that slowly does start to bring rebalance into the market.”
- High global inventories will keep oil below $60 a barrel until at least 2021, Scott Sheffield, chairman of Pioneer Natural Resources Co., said Monday in Washington.
- Enterprise Products Partners LP resumed service on its Seaway Legacy crude pipeline Sunday after repairs to a leak discovered Thursday were completed, according to person familiar with matter.
- Enquest Plc has started pumping oil from the Kraken field in the U.K. North Sea.
— With assistance by Ben Sharples, and Grant Smith