Hedge funds and portfolio managers have significantly reduced their long positions in oil futures over the past two months due to concerns about slowing demand and rising supply.
Bearish sentiment in the oil market has been fueled by weak manufacturing data from China and the United States, an end to Libya’s production halt.
Oil prices have plummeted to a 9-month low, erasing all gains from 2024, despite OPEC+’s decision to delay output hikes.
Despite a slight uptick in bullish bets last week, portfolio managers have slashed their long positions in oil futures over the past two months, fearing slowing demand and rising supply. In the week to August 27, hedge funds and commodity trading advisors were net buyers of the equivalent of 32 million barrels in the six most traded crude and petroleum futures, following net selling of 48 million barrels during the previous week, per data from trade exchanges compiled by energy analyst John Kemp in his blog. Yet, the buying in the latest reporting week did little to reverse the more than halving of the bullish bets in oil futures since early July.
Traders continue to be highly bearish on oil amid concerns about global oil demand, especially in the world’s top crude oil importer, China. The prospect of OPEC+ adding more supply has also weighed on sentiment this week, but today, OPEC+ decided to delay output hikes for at least another two months.
Traders and analysts fear that the market won’t absorb additional barrels amid slower-than-expected demand and rising non-OPEC+ supply, especially from North America and South America—the U.S., Canada, Brazil, and Guyana. In the week to August 27, hedge funds and other portfolio managers added fresh longs in Brent Crude, driven by the halt to part of Libya’s oil production over a political standoff between the rival governments in the east and west. As a result, the net long position – the difference between bullish and bearish bets – jumped by 31% to 81,000 lots in the week to August 27. At the same time, demand for the U.S. benchmark WTI was relatively muted. Ole Hansen, Head of Commodity Strategy at Saxo Bank, wrote in a commentary on traders’ positioning.
Overall, the combined net long at 267,000 lots “remains near the bottom of the long-term range due to relatively weak price action, as traders remain skeptical about crude’s upside potential amid OPEC+ production increases and China’s demand softness,” Hansen said.
The positioning of the hedge funds is so bearish that there is more than sufficient headroom to cut shorts and add longs.
But since August 27, the end of the latest reporting period, more bearish news and data have piled up to further weigh on market sentiment and oil prices. It will take a bullish end-of-summer demand reading in the coming weeks and signs of falling commercial inventories globally to lift oil prices and make traders more bullish on the commodity.
NN: Bend over gab your ankles grit your teeth and prepare for incoming…… I will be providing you live commentary after the NY opening.
Hamas propaganda video. Pulling on the heart strings of the gullible masses
WASHINGTON (AP) — The Biden administration and Israeli Prime Minister Benjamin Netanyahu were sharply at odds Thursday over prospects of reaching a deal for a Gaza cease-fire and hostage release, with Netanyahu saying it was “exactly inaccurate” that a breakthrough was close.
“There’s not a deal in the making,” Netanyahu said in an interview with “Fox and Friends.” His public skepticism comes as U.S. officials said they were working on a revised proposal to address remaining disputes between Israeli and Hamas leaders after the weekend discovery of six dead hostages added urgency to the talks.
National security spokesman John Kirby reiterated Thursday that only disagreements on “implementing details” of a cease-fire proposal need to be hammered out. “I’ve heard what the prime minister said. I’m not going to get into a back and forth with him in a public setting,” Kirby told reporters. “We still believe, though this is incredibly difficult … if there’s compromise, if there’s leadership, we can still get there.” President Joe Biden’s team, a lame-duck administration two months before the election, has projected optimism this summer as it works with fellow mediators Egypt and Qatar to try to get Israel and Hamas to agree to a truce in the 11-month war in Gaza. The deal would release more of the hostages taken by Hamas during its Oct. 7 attack on Israel, including Americans, in exchange for Palestinian prisoners — one of the big sticking points. U.S. officials said in the days before Israeli forces recovered the bodies of six recently slain hostages, including Israeli-American Hersh Goldberg-Polin, that Israeli and Hamas leaders could sign off on a deal as soon as the end of this week. “I’m optimistic. It’s far from over. Just a couple more issues. I think we’ve got a shot,” Biden told reporters last Friday.
“To ask Israel to make concessions after this murder is to send a message to Hamas: Murder more hostages, you’ll get more concessions,” Netanyahu said Thursday. “That’s the wrong thing to do, and I think the Israel public overwhelming is united against that.”
The Biden administration has stressed that its ally Israel has supported the negotiations and Hamas has been blocking a deal. This week, however, Biden said “no” when asked if Netanyahu was doing enough in the talks.
“We see time and again that Israel agrees to certain terms,” said Shira Efron, a policy adviser at the U.S.-based Israel Policy Forum, which analyzes Israeli-Palestinian relations. “It doesn’t say no, it agrees to certain terms — but then says, ‘Yes, but under those conditions.’”
“These public statements that come out after what seems to be an agreement … basically derail the agreement,” Efron said NN: Their in no deal. And deal making with terrorists…. Only brings more terrorism. Hamas only has so many hostage cards to play. And no other cards. They will never give up all there cads. Its a matter of survival. They know their days are numbered. Hence their desperate savagery and phycological ware fare!
Billionaire entrepreneur Elon Musk wrote on X that United States Vice President and Democratic nominee in the 2024 presidential election Kamala Harris intends to “destroy” the right to free speech “under the constitution.” Musk, an outspoken critic of the Democratic Party, responded to another X user who mentioned him, Robert F. Kennedy Jr., and Tulsi Gabbard as “raising concerns” about the freedom of speech in the US if Harris becomes president.The world’s wealthiest individual repeatedly criticized Harris and the Democratic Party for their stance toward free speech. Warning they support censorship and the erosion of constitutional liberties.
The Organization of the Petroleum Exporting Countries (OPEC) and oil-producing nations outside of OPEC confirmed on Thursday that eight of its members have agreed to extend their additional voluntary production cuts for two months until the end of November 2024. The initial cut of 2.2 million barrels per day, implemented voluntarily by Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia, and the United Arab Emirates, will now be extended until the end of November, after which these cuts will be gradually phased out on a monthly basis starting December 1, 2024. The overproducing countries once again confirmed their commitment to fully compensating for the entire surplus volume by September 2025.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 6.9 million barrels from the previous week. At 418.3 million barrels, U.S. crude oil inventories are about 5% below the five year average for this time of year.
U.S. crude oil refinery inputs averaged 16.9 million barrels per day during the week ending August 30, 2024, which was 36 thousand barrels per day more than the previous week’s average. Refineries operated at 93.3% of their operable capacity last week. Gasoline production increased last week, averaging 9.7 million barrels per day. Distillate fuel production increased last week, averaging 5.2 million barrels per day. U.S. crude oil imports averaged 5.8 million barrels per day last week, decreased by 768 thousand barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.3 million barrels per day, 8.0% less than the same four-week period last year. Total
motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 655 thousand barrels per day, and distillate fuel imports averaged 182 thousand barrels per day. Total motor gasoline inventories increased by 0.8 million barrels from last week and are about 2% below the five year average for this time of year. Both finished gasoline inventories and blending components inventories increased last week. Distillate fuel inventories decreased by 0.4 million barrels last week and are about 10% below the five year average for this time of year. Propane/propylene inventories increased by 2.6 million barrels from last week and are 12% above the five year
average for this time of year. Total commercial petroleum inventories decreased by 8.0 million barrels last week.
Total products supplied over the last four-week period averaged 20.8 million barrels a day, down by 1.6% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9.1 million barrels a day, up by 0.9% from the same period last year. Distillate
fuel product supplied averaged 3.7 million barrels a day over the past four weeks, down by 0.7% from the same period last year. Jet fuel product supplied was up 2.8% compared with the same four-week period last year
Crude oil inventories in the United States fell by a staggering 7.4 million barrels for the week ending August 30, according to The American Petroleum Institute (API). Analysts had expected a far smaller 900,000-barrel dip. For the week prior, the API reported a 3.4-million-barrel decrease in crude inventories. So far this year, crude oil inventories are more than 2 million barrels under where they were at the start of the year, having decreased by 10 million barrels, according to API data.
Oil prices continued their decline on Wednesday ahead of the API data release. Oils total loss in the past week is more than $7 per barrel. Disappointing economic data out of the United States and China spooked markets. Gasoline inventories also fell this week, by 300,000 barrels, on top of last week’s 1.86-million-barrel decrease. As of last week, gasoline inventories are 3% below the five-year average for this time of year, according to the latest EIA data. Distillate inventories fell also, by 400,000 barrels, on top of last week’s 1.4-million-barrel decrease. Distillates were already about 10% below the five-year average for the week ending August 23, the latest EIA data shows. Cushing inventories completed the draws, with a loss of 800,000 barrels, according to API data, which add onto the 486,000-barrel draw from the previous week. NN: Now we wait for todays EIA inventory report for confirmation.
Israeli Prime Minister Benjamin Netanyahu pointed out on Wednesday that any deal involving the removal of troops from the Gaza-Egypt border’s Philadelphi Corridor is a “false narrative,” seemingly in response to White House National Security Communications Advisor John Kirby’s assertions that Israel had agreed to a framework that included the mentioned withdrawal. “There is a possibility of reaching a Gaza ceasefire deal if we stick to our strategy,” Netanyahu said during his address to the foreign media in Tel Aviv. “We are committed to our war goals. If we relieve pressure on Hamas by leaving the Philadelphi Corridor we won’t free our hostages.” NN: This is some serious shit!! Their is no deal.
Oil prices fell to their lowest level in 9 months early on Wednesday morning on concerns about demand and potential supply increases.
OPEC+ is reconsidering its plan to ease production cuts in October due to the price slump.
Oil prices have since recovered slightly on the news that OPEC+ is considering maintaining its production cuts.
LONDON, Sept 4 (Reuters) – OPEC+ is discussing a delay in a planned output increase next month as oil prices hit their lowest in 9 months, three sources from the producer group told Reuters on Wednesday. Oil prices have been falling together with other asset classes on concerns about a weak global economy and particularly soft data from China, the world’s biggest oil importer. Last week, the group looked set to proceed with a 180,000 barrel per day (bpd) hike in October, but market volatility from oil facility shutdowns in Libya and a weak demand outlook have raised concern within the group, one of the sources said.
There were suggestions to delay the increase, one of the sources said. Another said a delay was looking highly possible.
Eight members of the OPEC+ – which includes its allies – are scheduled to raise output by 180,000 bpd in October as part of a plan to begin unwinding their most recent layer of output cuts of 2.2 million bpd while keeping other cuts in place until the end of next year. Prices have experienced high volatility in recent weeks as a standoff between rival factions in OPEC producer Libya over control of the central bank led to a loss of at least 700,000 bpd of production.
Prices slumped by about 5% on Tuesday on news that a possible deal to resolve the conflict was in the works.
” RBC Capital analyst Helima Croft said in a note. After prices plunged by nearly 5% on Tuesday, reports began to emerge on Wednesday that the OPEC+ group is now reconsidering the unwinding of the cuts as of October.
“The further pressure we see on prices the more likely that OPEC+ will be forced to scrap plans to bring supply back onto the market,” ING commodities strategists Warren Patterson and Ewa Manthey wrote in a note on Wednesday. “However, with the balance looking soft through 2025, the question is when the group will eventually be able to bring supply back onto the market without putting significant pressure on prices,” they added.
Issue has become a key sticking point in cease-fire talks
Hamas says Israeli forces must leave the corridor in Gaza
Israel’s government voted to maintain a military presence in Gaza’s so-called Philadelphi corridor, an issue that’s proved a key sticking point in cease-fire talks with Hamas.
Prime Minister Benjamin Netanyahu’s security cabinet almost all approved the policy, according to a readout of Thursday’s meeting seen by Bloomberg.
Hamas has insisted that Israel’s forces leave the area, which runs along the Egypt-Gaza border at the south of the Palestinian territory, once a truce starts. The problem is vexing mediators as they try to persuade the two sides to pause and eventually end the devastating war in Gaza, now almost into its 12th month.
The Philadelphi Corridor Has Become a Major Point of Contention Between Israel and Hamas
Source: OpenStreetMap
In the last few weeks, Israel has taken a firmer stance on the Philadelphi corridor, with Netanyahu saying his soldiers are needed there to prevent Hamas smuggling weapons into Gaza from Egypt. The Israeli cabinet members said their vote will bring a cease-fire closer because it will make clear to Hamas that it needs to compromise, according to the read-out. Netanyahu said the Oct. 7 attack by Hamas, which triggered the war in Gaza, “was possible as a result of the Philadelphi axis not being in Israel’s hands,” the read-out said. “The prime minister said this reality will not repeat itself and that this time Israel is determined to keep this border under its control.” Two ministers didn’t vote in favor. They were Defense Minister Yoav Gallant, who was against the measure, and Itamar Ben Gvir, the national security minister, who abstained. Ben Gvir opted not to vote because Netanyahu proposed some draw down of troops and the national security minister wants no reduction at all, according to an official familiar with the matter. Gallant opposed the proposal because he argued it would delay a truce — rather than force Hamas to accept one more quickly — and potentially cost the lives of more hostages, according to an official close to the minister. The defense minister has been at odds with Netanyahu over many aspects of the war and they have frequently clashed in public. The vote was also put to the security cabinet without warning, the official said. The cease-fire talks, mediated by the US, Qatar and Egypt, have dragged on for months and continued this week among junior negotiators in Doha. The corridor isn’t the only obstacle. Israel and Hamas are yet to agree how many hostages will be released from Gaza in the first phase of a deal, as well as how many Palestinians will be freed from Israeli jails. In addition, Netanyahu says Israel will keep forces along a second corridor called Netzarim, which bisects Gaza, to block Hamas fighters moving back into northern parts of the territory. Hamas is against that demand. Hamas, designated a terrorist organization by the US and European Union, killed 1,200 people and took around 250 hostage when its fighters swarmed into southern Israel from Gaza on Oct. 7. Israel’s subsequent offensive has killed more than 40,000 Palestinians, according to the Hamas-run health ministry in Gaza. Israelis Begin Labor Strikes as Anger Over Hostages Build.
Ben-Gvir says he is working against ceasefire
Israeli National Security Minister Itamar Ben-Gvir said on Monday that he and his party are “using our power in the government to prevent a reckless deal” between Israel and Hamas. Mass demonstrations are taking place in Israel today as protesters demand an agreement that would allow the release of hostages held by Hamas. “With Hamas you need to speak only between gunsights,” Ben-Gvir told a group of protesters, according to the Times of Israel. The ceasefire proposal currently under consideration is regarded as possibly the last chance to halt the conflict in the Gaza Strip. Why last chance????
